UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 20-F

(Mark One)

o		REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) or (g) OF THE SECURITIES EXCHANGE ACT OF 1934

þ		ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2008

o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

o		SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

GENESIS LEASE LIMITED

(Exact name of Registrant as specified in its charter)

(Jurisdiction of incorporation or organization)

(Address of principal executive office)

John McMahon, Telephone number: +353 61 233 300, Fax number: +353 61 364 642
(Name, Telephone, Email and/or Facsimile number and Address of Company Contact Person)

Title of each class		Name of each exchange on which registered
American Depositary Shares		New York Stock Exchange
Common Shares, par value of $0.001 per share		New York Stock Exchange*

*		Not for trading, but only in connection with the registration of American Depositary Shares representing these shares, pursuant to the requirements of the Securities and Exchange Commission.

Securities registered or to be registered pursuant to Section 12(g) of the Act.

None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.

None

     Indicate the number of outstanding shares of each of the issuer’s classes of capital or common shares as of the close of the period covered by the annual report.

34,341,095 Common Shares, par value of $0.001 per share.

     Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes o       No þ

     If this report is an annual or transition report, indicate by check mark, if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

Yes o       No þ

     Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes þ       No o

     Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o		Accelerated filer þ		Non-accelerated filero

     Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP þ		International Financial Reporting Standards as issued		Other o
		by the International Accounting Standards Board o

     If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow:

Item 17 o       Item 18 o

     If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o       No þ

 

 

PRELIMINARY NOTE

   This Annual Report should be read in conjunction with the financial statements and accompanying notes included in this report.

This Annual Report contains forward-looking statements that involve risks and uncertainties. These statements include forward-looking statements both with respect to us specifically and the aircraft leasing industry generally. Statements that include the words “expect,” “intend,” “plan,” “believe,” “project,” “anticipate,” “will,” and similar statements of a future or forward-looking nature identify forward-looking statements. The forward-looking statements contained in this Annual Report are based on management’s current expectations and are subject to uncertainty and changes in circumstances. There can be no assurance that future developments affecting us will be those that we have anticipated. Actual results may differ materially from these expectations due to changes in global, regional or local political, economic, business, competitive, market, regulatory and other factors, many of which are beyond our control. We believe that these factors include, but are not limited to, those described under Item 3.D. “Risk Factors” and elsewhere in this Annual Report. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, our actual results may vary in material respects from those projected in these forward-looking statements. We undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise.

We acquired our initial portfolio of 41 commercial jet aircraft (the “Initial Portfolio”) from affiliates of General Electric Company (“GE”) on December 19, 2006, with the net proceeds of our initial public offering (“IPO”), a private placement of shares to GE (the “private placement”) and the issuance of aircraft lease-backed notes in a securitization transaction (the “securitization”). Since our IPO, we have increased our portfolio from 41 to 54 aircraft through acquisitions from affiliates of GE and from independent airlines in purchase-leaseback transactions.

Unless the context requires otherwise, when used in this Annual Report, (1) the term “Company” refers only to Genesis Lease Limited, (2) the terms “Genesis,” “we,” “our” and “us” refer to Genesis Lease Limited and its subsidiaries, including Genesis Funding Limited (“Genesis Funding”), Genesis Acquisition Limited (“Genesis Acquisition”) and Genesis Portfolio Funding I Limited (“Genesis Portfolio”), (3) “GECAS” refers to GE Commercial Aviation Services Limited, together with its subsidiaries, (4) our “predecessor” refers to the combination of the 41 aircraft included in our Initial Portfolio from the date that each aircraft was acquired by an affiliate of GE, as such aircraft were owned by affiliates of GE until the completion of our IPO on December 19, 2006, (5) all references to our shares refer to our common shares held in the form of American Depositary Shares, (“ADSs”), and (6) all percentages and weighted averages of the aircraft in our portfolio have been calculated using the average of half life appraised base values as at December 31, 2008, and percentages may not total due to rounding.

INDEX

PART ONE
Item 1. Identity of Directors, Senior Management and Advisors — Not Applicable			4
Item 2. Offer Statistics and Expected Timetable — Not Applicable			4
Item 3. Key Information			4
A. Selected Financial Data			4
B. Capitalization and Indebtedness — Not Applicable			5
C. Reasons for the Offer and Use of Proceeds — Not Applicable			5
D. Risk Factors			5
Item 4. Information on the Company			32
A. History and Development of the Company			32
B. Business Overview			32
C. Organizational Structure			36
D. Property, Plants and Equipment			36
Item 4A. Unresolved Staff Comments — Not Applicable			46
Item 5. Operating and Financial Review and Prospects			46
A. Results of Operations			46
B. Liquidity and Capital Resources			55
C. Research and Development — Not Applicable			63
D. Trend Information			63
E. Off-Balance Sheet Arrangements — Not Applicable			64
F. Contractual Obligations			64
G. Safe Harbor			66
Item 6. Directors, Senior Management and Employees			67
A. Directors and Senior Management			67
B. Compensation			70
C. Board Practices			73
D. Employees			74
E. Share Ownership			74
Item 7. Major Shareholders and Related Party Transactions			75
A. Major Shareholders			75
B. Related Party Transactions			75
C. Interests of Experts and Counsel — Not Applicable			75
Item 8. Financial Information			76
A. Combined and Consolidated Financial Information and Other Financial Information			76
B. Significant Changes — Not Applicable			77
Item 9. The Offer and Listing			77

Item 10. Additional Information			78
A. Share Capital — Not Applicable			78
B. Memorandum and Articles of Association			78
C. Material Contracts			78
D. Exchange Controls			86
E. Taxation			86
F. Dividends and Paying Agents — Not Applicable			95
G. Statement by Experts — Not Applicable			95
H. Documents on Display			95
I. Subsidiary Information — Not Applicable			96
Item 11. Quantitative and Qualitative Disclosures About Market Risk			96
Item 12. Description of Securities Other Than Equity Securities — Not Applicable			96
PART TWO
Item 13. Defaults, Dividend Arrearages and Delinquencies			97
Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds			97
Item 15. Controls and Procedures			97
Item 16A. Audit Committee Financial Expert			99
Item 16B. Code of Ethics			99
Item 16C. Principal Accountant Fees and Services			99
Item 16D. Exemptions from the Listing Standards for Audit Committees — Not Applicable			99
Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers			99
Item 16G. Corporate Governance			100
PART THREE
Item 17. Financial Statements — Not Applicable			101
Item 18. Financial Statements			101
Item 19. Exhibits			101
EX-4.24.1: AMENDMENT NO. 1 TO CREDIT AGREEMENT
EX-4.24.2: AMENDMENT NO. 2 TO CREDIT AGREEMENT
EX-4.24.3: AMENDMENT NO. 3 TO CREDIT AGREEMENT
EX-4.24.4: AMENDMENT NO. 4 TO CREDIT AGREEMENT
EX-4.30: CHANGE OF CONTROL PLAN
EX-8.1: SUBSIDIARIES
EX-12.1: CERTIFICATION
EX-12.2: CERTIFICATION
EX-13.1: CERTIFICATION
EX-13.2: CERTIFICATION

PART I

Item 1. Identity of Directors, Senior Management and Advisors

Not applicable.

Item 2. Offer Statistics and Expected Timetable

Not applicable.

Item 3. Key Information

A. Selected Financial Data

The following selected financial data is derived from our audited combined and consolidated financial statements, prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”), and should be read in conjunction with, and is qualified by reference to, Item 5. “Operating and Financial Review and Prospects” and our combined and consolidated financial statements and related notes thereto included in Item 18. “Financial Statements” in this Annual Report.

										Combined
										and
		Combined				Combined				Consolidated				Consolidated				Consolidated
		Years Ended December 31,
		2004				2005				2006				2007				2008
		(USD in thousands, except share and per share data)
Revenues
Rental of Flight Equipment		$	99,414			$	117,861			$	153,187			$	181,333			$	215,985
Other income			—				—				—				6,771				8,045
Total revenue			99,414				117,861				153,187				188,104				224,030
Expenses
Depreciation			35,005				42,462				51,398				62,259				78,690
Interest			28,680				34,995				46,026				55,236				70,971
Maintenance expense			1,019				1,989				2,327				1,073				3,344
Selling, general and administrative			2,400				3,144				7,312				20,991				23,884
Other expenses			—				—				—				3,337				—
Total operating expenses			67,104				82,590				107,063				142,896				176,889
Income Before Taxes			32,310				35,271				46,124				45,208				47,141
Provision for income taxes			14,892				13,900				17,367				6,053				6,224
Net Income		$	17,418			$	21,371			$	28,757			$	39,155			$	40,917

We calculate our earnings per share in accordance with Statement of Financial Accounting Standards (“SFAS”) 128, Earnings Per Share. Basic net earnings per share is computed based on the weighted average number of common shares outstanding during the year. Diluted net earnings per share reflects the dilution potential that could occur if securities or other contracts to issue common shares were exercised resulting in the issuance of common shares that then shared in our net income.

The shares used in the computation of our basic and diluted net earnings per share are as follows:

		2006				2007				2008
Weighted average number of shares outstanding:
Basic			1,116,296				35,859,164				35,968,128
Diluted			1,118,050				35,867,105				35,968,128

     The following table presents the net income per share calculated for the year ended December 31, 2006, 2007 and 2008:

Net income per share
Basic		$	25.76			$	1.09			$	1.14
Diluted		$	25.72			$	1.09			$	1.14

		As at December 31,
		2004				2005				2006				2007				2008
		(USD in thousands)
Balance Sheet Data:
Cash and cash equivalents		$	—			$	—			$	26,855			$	30,101			$	60,206
Restricted cash			—				—				15,471				32,982				33,718
Total assets			936,918				1,082,997				1,316,058				1,675,169				1,757,695
Long-term debt			—				—				810,000				1,050,961				1,128,393
Total liabilities			92,115				101,006				839,383				1,132,830				1,282,258
GE net investment			844,803				981,991				—				—				—
Total shareholders’ equity			—				—				476,675				542,339				475,437
Total liabilities and GE net investment/shareholders’ equity		$	936,918			$	1,082,997			$	1,316,058			$	1,675,169			$	1,757,695

B. Capitalization and Indebtedness

Not applicable.

C. Reasons for the Offer and Use of Proceeds

Not applicable.

D. Risk Factors

You should carefully consider the following risks. These risks could materially and adversely affect our business, prospects, financial condition, results of operations, cash flows and ability to pay dividends and cause the trading price of our shares to decline. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially and adversely affect our business, prospects, financial condition, results of operations, cash flows and ability to pay dividends.

Risks Related to Our Business

Changes in economic conditions could adversely affect our business.

     Our business and results of operations are significantly impacted by general economic and industry conditions. The stress experienced by global capital markets that began in the second half of 2007 continued and substantially increased during 2008 and into 2009. In particular, the substantial losses experienced by the global banking industry have led to a dramatic increase in the cost and deterioration in the availability of capital. Many governments have sought to establish programs to support the banking industry in order to encourage lending and to mitigate against a sustained recessionary environment. Nevertheless, continued concerns over the availability and cost of credit, declining business and consumer confidence and increased unemployment, have precipitated an economic recession throughout the world, resulting in expectations for reduced global economic growth.

     A continued decline in economic activity and conditions in the United States, Europe and other markets in which we operate could adversely affect our financial condition and results of operations. For example, several airlines across the world filed for bankruptcy in 2008 due to high oil prices in the first half of the year and decreased demand for air travel resulting from the downturn in economic conditions. As a result,

some of our leases with airlines have been terminated, and we have been required to bear unforeseen maintenance expenses, additional remarketing expenses and lost revenues. The economic downturn and the impairment of credit markets have also resulted in a decline in aircraft values and lease rates. A protracted economic downturn could exacerbate these adverse conditions. Although several governments have taken steps to mitigate the disruption to financial markets, there can be no assurances that government responses will restore consumer confidence for the foreseeable future.

We will need additional capital to finance our growth, and we may not be able to obtain such capital on terms acceptable to us, or at all.

Our liquidity needs include the financing of additional aircraft and other aviation assets that we expect will drive our growth. We plan to finance acquisitions through borrowings under our revolving credit facility or other debt facilities, additional equity and debt offerings, and private placements of equity and debt securities.

Our ability to execute our business strategy to acquire these additional assets depends to a significant degree on our ability to access debt and equity capital markets. During 2008, the capital and credit markets experienced extreme volatility and disruption. As a result, access to capital and credit markets and to other available forms of financing and liquidity has been significantly impaired for us and for many other companies.

Current market conditions have exerted significant downward pressure on the price of our common shares, which could impact our ability to raise capital through the issuance of additional equity related securities, or to obtain shareholder approval (if required) for the issuance of equity securities. If we were to issue equity or equity-related securities, such securities could take various forms, including convertible or hybrid debt, common shares, preferred shares and warrants. Preferred shares would have terms that are more favorable than our common shares. Any issuance of equity securities could dilute the interests of our existing shareholders and adversely affect the trading price of our common shares.

Our access to capital markets also will depend on a number of other factors, such as our historical and expected performance, compliance with the terms of our debt agreements, industry and market trends and the relative attractiveness of alternative investments. During 2008, the turmoil in the financial markets has caused banks and financial institutions to decrease the amount of capital available for lending. If we are unable to raise funds through debt and equity capital markets on terms that are acceptable to us, then we may be unable to implement our growth strategy of making acquisitions of additional aircraft and other aviation assets.

A deterioration in the financial condition of the commercial airline industry would have an adverse impact on our ability to lease our aircraft.

The financial condition of the commercial airline industry is of particular importance to us because we lease most of our aircraft to commercial airline customers. Our ability to achieve our primary business objectives of growing our lease portfolio will depend on the financial condition and growth of the commercial airline industry. The risks affecting our airline customers are generally beyond our control, but because they have a significant impact on our customers they affect us as well. Our ability to succeed depends on the financial strength of our customers and their ability to manage these risks. To the extent that our customers are adversely affected by these risk factors, we may experience:

•

a higher incidence of lessee defaults, lease restructurings, repossessions and airline bankruptcies and restructurings, resulting in lower lease margins due to maintenance, legal and other costs associated with the repossession, as well as lost revenue for the time the aircraft are off lease and possibly lower lease rates from the new lessees; and

•

an inability to lease aircraft on commercially acceptable terms, resulting in lower lease margins due to aircraft not earning revenue and resulting in storage, insurance and maintenance costs.

The aviation industry is inherently cyclical and a significant downturn in the industry would adversely impact our lessees’ ability to make payments to us, which would adversely affect our financial results and growth prospects.

The aviation industry is inherently cyclical. The years 2001 through 2004 were characterized by falling demand, rising costs and significant financial losses, particularly in the US and Europe. This downturn was exacerbated by the terrorist attacks on September 11, 2001, prolonged military action in Iraq and Afghanistan, rising fuel prices, SARS and avian influenza and saw many airlines, including some of our lessees, file for bankruptcy protection or implement reductions in capacity, service and workforce.

     The period from 2005 through 2007 was characterized by rising demand, airline profitability and significant purchases of new aircraft. The period from 2007 through 2008, however, was characterized by a dramatic deterioration in the global financial markets, declining business and consumer confidence and increased unemployment, resulting in expectations for reduced global economic growth going forward. During 2008, the aviation industry also experienced a significant spike in oil prices and given the developing economic downturn, the industry continues to face many challenges including falling traffic demand, reductions in capacity and the financing of substantial commitments for new aircraft in a market where there has been a deterioration in the availability of capital.

A significant downturn may place already financially weakened lessees under further duress and may result in further airline bankruptcies exerting downward pressure on lease rates, aircraft and engine market values and the grounding of significant numbers of aircraft.

The recent changes in demand and supply of aircraft could depress lease rates and the value of our aircraft portfolio.

The economic downturn and the expected slowdown in air travel have contributed to a decrease in the demand for aircraft, while a number of recent airline bankruptcies, as well as financial challenges potentially facing other airlines, may result in an increase in the supply of aircraft. In addition, several large portfolios of leased aircraft may be available for sale. For example, it has been reported that American International Group intends to sell International Lease Finance Corporation (“ILFC”), its aircraft leasing business, which is the largest aircraft lessor in the world, measured by portfolio value. It has also been reported that Royal Bank of Scotland is considering a sale of its aircraft financing arm, RBS Aviation Capital. Allco Finance Group, another aircraft lessor, has announced the appointment of voluntary administrators under Australian law and may sell its aircraft portfolio. Babcock & Brown has also announced an asset disposal program, including the sale of its aircraft leasing business. This shift in supply/demand dynamics may lead to decreases in aircraft lease rates and values. A decrease in lease rates could adversely affect our lease revenues in future periods as our current leases expire or to the extent that airlines default on their leases. A decrease in aircraft values would adversely affect the value of the aircraft in our portfolio. Furthermore, secondary aircraft trading may be financed through borrowings, and this may exert further pressure on the availability of aircraft financing in the market, which could adversely affect our ability to obtain additional borrowings or refinance our existing debt.

A decrease in lease rates and the value of our leased assets could have an adverse effect on our financial results, growth prospects and ability to meet our obligations.

The supply and demand for aircraft is affected by various cyclical and non-cyclical factors that are beyond our control, including:

	•		cancellations of orders for aircraft;
	•		accuracy of estimates relating to future supply and demand made by manufacturers and lessees;
	•		operating costs, availability of jet fuel and general economic conditions affecting our lessees’ operations;
	•		geopolitical and other events, including war, acts of terrorism, outbreaks of epidemic diseases and natural disasters;
	•		governmental regulation, including new airworthiness directives and environmental regulations;
	•		manufacturer production levels, technological innovation and delays in delivery of aircraft;
	•		retirement and obsolescence of aircraft models;
	•		manufacturers merging or exiting the industry or ceasing to produce aircraft or engine types;
	•		reintroduction into service of aircraft or engines previously in storage; and
	•		airport and air traffic control infrastructure constraints.

These factors may produce sharp decreases in asset values and achievable lease rates, which would have an impact on our cost of acquiring aircraft or other aviation assets, may result in lease defaults and could delay or prevent the aircraft or other aviation assets from being re-leased on favorable terms, or, if desired, sold on favorable terms.

Factors that increase the risk of decline in aircraft value and achievable lease rates could have an adverse effect on our financial results and growth prospects and on our ability to meet our obligations.

Factors that may affect the value and achievable lease rates of our aircraft and other aviation assets include:

	•		the particular maintenance and operating history of the airframes and engines;
	•		the number of operators using that type of aircraft or engine;
	•		whether an aircraft or other aviation asset is subject to a lease and, if so, whether the lease terms are favorable to the lessor;
	•		the age of our aircraft and other aviation assets;
	•		airworthiness directives and service bulletins;
	•		aircraft noise and emission standards;
	•		any tax, customs, regulatory and other legal requirements that must be satisfied when an aircraft is purchased, sold or re-leased;
	•		compatibility of our aircraft configurations or specifications with other aircraft owned by operators of that type; and
	•		decreases in the creditworthiness of our lessees.

Any decrease in the values of and achievable lease rates for commercial aircraft or other aviation assets that may result from the above factors or other unanticipated factors may have a material adverse effect on our financial results and growth prospects and our ability to meet our obligations.

We operate in a highly competitive market for investment opportunities in aircraft and other aviation assets.

The leasing and remarketing of commercial jet aircraft is highly competitive. As the exclusive servicer of our aircraft, GECAS competes in leasing, re-leasing and selling our aircraft with other aircraft leasing companies, including ILFC, AerCap, Aircastle, Aviation Capital Group, AWAS, Babcock & Brown Aircraft Management, Babcock & Brown Air Limited, BOC Aviation, Boeing Capital, CIT Aerospace, Macquarie Aircraft Leasing and RBS Aviation Capital, among others. We also may encounter competition from other entities that selectively compete with us, including:

	•		airlines;
	•		aircraft manufacturers;
	•		financial institutions (including those seeking to dispose of repossessed aircraft at distressed prices);
	•		aircraft brokers;
	•		special purpose vehicles formed for the purpose of acquiring, leasing and selling aircraft; and
	•		public and private partnerships, investors and funds, including private equity and hedge funds.

Competition for a leasing transaction is based principally upon lease rates, delivery dates, lease terms, reputation, management expertise, aircraft condition, specifications and configuration and the availability of the types of aircraft necessary to meet the needs of the customer. Some of our competitors have significantly greater resources than we have. In addition, some competing aircraft lessors have a lower overall cost of capital and may provide financial services, maintenance services or other inducements to potential lessees that we cannot provide. Given the financial condition of the airline industry, many airlines have reduced their capacity by eliminating select types of aircraft from their fleets. This has resulted in an increase in available aircraft of these types, a decrease in rental rates for these aircraft and a decrease in market values of these aircraft.

Competition in the purchase and sale of used aircraft is based principally on the availability of used aircraft, the availability of capital, price, the terms of the lease to which an aircraft is subject and the creditworthiness of the lessee. When we decide to dispose of an aircraft, GECAS, as our servicer, will arrange the disposition pursuant to the terms of the servicing agreements for that used aircraft. In doing so, GECAS may compete with the aircraft leasing companies listed above, as well as with the other types of entities described above and other investors. GECAS is not required to assist us in the purchase of aircraft, and therefore we also may compete with GECAS when seeking to acquire aircraft.

If demand for leased aircraft does not increase, we may not be able to expand our business.

Over the past 20 years, the world’s airlines have leased a growing proportion of their aircraft. According to market data, the proportion of the global fleet under operating lease has increased from 17% in 1990 to more than 30% in recent years. Our growth strategy contemplates future acquisitions and leasing of additional commercial aircraft and other aviation assets. If, however, the aggregate demand for leased aircraft does not expand, then we may be unable to implement our growth strategy through aircraft acquisitions.

Fuel prices affect the profitability of the airline industry, and increases in fuel prices may have an adverse effect on our lessees’ ability to meet their lease payment obligations to us.

Airlines are significantly impacted by changes in the price and availability of fuel. Governmental policy concerning fuel production, transportation or marketing, changes in fuel production capacity, weather-related events, natural disasters, political disruptions or wars involving oil-producing countries, environmental concerns, currency exchange rates and other unpredictable events may result in fuel supply shortages and fuel price increases. Fuel prices increased in 2008 to new record highs, with the price of crude oil reaching more than $145 per barrel in July 2008 before falling to under $34 per barrel in December 2008. Many airlines entered into hedging arrangements which locked in fuel at relatively high prices. As a consequence, some airlines were not in a position to benefit from a fall in fuel prices during the latter part of 2008, and a number of them will realize significant losses from these hedging positions.

Although fuel costs have receded significantly from their highs in 2008, they will continue to have a significant impact on airline profitability. Due to the competitive nature of the airline industry, airlines have limited ability to pass increases in fuel prices to their customers by increasing fares. In addition, airlines may not be able to hedge their exposure to price increases. Increases in fuel prices may:

	•		lead to further airline bankruptcies, which may lead to cancellations of our leases and the return of our aircraft;
	•		impair our lessees’ ability to make rental and other lease payments;
	•		lead to lease restructurings and aircraft repossessions; and
	•		increase the costs of servicing and remarketing our aircraft at favorable rates.

Any of these effects could have a material adverse effect on our financial condition, results of operations and prospects.

The effects of terrorist attacks and geopolitical conditions may negatively affect the airline industry. This may cause our lessees to default on their lease payment obligations to us.

As a result of the September 11, 2001 terrorist attacks in the United States and subsequent terrorist attacks in other parts of the world, airports have increased security restrictions, airline costs for aircraft insurance and enhanced security measures have increased and airlines have faced increased difficulties in acquiring war risk and other insurance at reasonable costs. Terrorist attacks and geopolitical conditions have harmed the airline industry, and concerns about geopolitical conditions and further terrorist attacks could harm airlines in the future as a result of various factors, including:

	•		higher costs to airlines because of increased security measures;
	•		the inconvenience of additional security measures;
	•		the price and availability of jet fuel and the cost and
	•		significantly higher costs of aircraft insurance coverage for claims caused by acts of war, terrorism, sabotage, hijacking and other similar perils, and the extent to which such insurance has been or will continue to be available.

Future terrorist attacks, war or armed hostilities, or the fear of such events, may further increase airline costs, depress air travel demand, cause certain aviation insurance to become available only at significantly increased premiums or not be available at all and could have a further adverse impact on the airline industry and on the financial condition and liquidity of

our lessees, aircraft values and rental rates, all of which could adversely affect our financial results and growth prospects.

We depend on aircraft and engine manufacturers’ success in remaining financially stable and producing aircraft.

The supply of aircraft, which we purchase and lease, is dominated by two airframe manufacturers, Boeing and Airbus, and a limited number of engine manufacturers. We therefore depend on these manufacturers’ success in remaining financially stable and producing aircraft and related components which meet airlines’ demands and providing customer support. Further, competition between the manufacturers for market share is escalating and may cause instances of deep discounting for certain aircraft types and may have a negative impact on our competitive pricing when we sell or lease aircraft. Should the manufacturers fail to respond appropriately to changes in the market environment or fail to fulfill their contractual obligations, we may experience:

	•		an inability to acquire aircraft and related components on terms that will allow us to lease those aircraft and related components to customers at our anticipated profit levels, resulting in lower growth rates or a contraction in our fleet;
	•		poor customer support from the manufacturers of aircraft and components resulting in reduced demand for a particular manufacturer’s product, creating downward pressure on demand for those aircraft and components in our fleet and reduced market lease rates for those aircraft; and
	•		reduction in our competitiveness due to deep discounting by the manufacturers, which may lead to reduced market lease rates and may adversely affect the value of our portfolio and our ability to remarket or sell some of the aircraft in our fleet.

Unforeseen difficulties and costs associated with the acquisition, financing and/or management of our aircraft portfolio and other aviation assets could reduce or prevent our future growth and profitability.

Our growth strategy contemplates future acquisitions and leasing of additional commercial aircraft and other aviation assets. Any acquisition of aircraft or other aviation assets may not be profitable to us after the acquisition and may not generate sufficient cash flow to justify our investment. In addition, our acquisition growth strategy exposes us to risks that may harm our business, financial condition, results of operations and cash flows, including risks that we may:

	•		fail to realize anticipated benefits, such as new customer relationships or cash flow enhancements;
	•		impair our liquidity by using a significant portion of our available cash or borrowing capacity to finance acquisitions;
	•		significantly increase our interest expense and financial leverage to the extent we incur additional debt to finance acquisitions;
	•		incur or assume unanticipated liabilities, losses or costs associated with the aircraft or other aviation assets that we acquire; or
	•		incur other significant charges, including asset impairment or restructuring charges.

Unlike new aircraft, existing aircraft typically do not carry warranties as to their conditions (although certain manufacturer warranties may still be effective and assignable when the aircraft is purchased). Although we may inspect an existing aircraft and its documented maintenance, usage, lease and other records prior to acquisition, such an inspection normally

would not provide us with as much knowledge of an aircraft’s condition as we would have if it had been built for us. In addition, we may not have the opportunity to inspect each aircraft that we acquire. Repairs and maintenance costs for existing aircraft are difficult to predict and generally increase as aircraft age and may have been adversely affected by prior use. These costs could decrease our cash flow and reduce our liquidity.

The terms of our indebtedness may limit our operational flexibility.

The terms of our indebtedness expose us to certain risks and operational restrictions, including:

	•		our aircraft leases and several of our aircraft serve as collateral for our financings, the terms of which restrict our ability to sell aircraft and require us to use proceeds from sales of aircraft, in part, to repay amounts outstanding under those financings;
	•		we are required to dedicate a significant portion of our cash flow from operations to debt service payments, thereby reducing the amount of our cash flow available to fund working capital, make capital expenditures and satisfy other needs;
	•		restrictions on our subsidiaries’ ability to distribute excess cash flow to us under certain circumstances;
	•		lessee, geographical and other concentration limits on flexibility in leasing our aircraft;
	•		requirements to obtain policy provider consents and rating agency confirmations for certain actions (in the case of the notes issued in the securitization); and
	•		restrictions on our ability to incur additional debt, create liens on assets, sell assets, make freighter conversions and make certain investments or capital expenditures.

The restrictions described above may impair our ability to operate and to compete effectively with our competitors. Similar restrictions may be contained in the terms of future financings that we may enter into to finance our growth, including our credit facility.

We are a holding and a financing company and rely on our subsidiaries to provide us with funds necessary to meet our financial obligations.

We are a holding and a financing company and our principal asset is the equity interests we hold in our subsidiaries that hold our aircraft. As a result, we depend on dividends and other payments from these subsidiaries and from any other subsidiaries through which we may conduct operations in the future, to generate the funds necessary to meet our financial obligations. The subsidiaries that hold our aircraft are legally distinct from us and are often restricted from paying dividends or otherwise making funds available to us pursuant to agreements governing our indebtedness. Any other subsidiaries through which we may conduct operations in the future will also be legally distinct from us and may be similarly restricted from paying dividends or otherwise making funds available to us under certain conditions.

All of our principal debt facilities have financial covenants. If we are unable to comply with these covenants, then the amounts outstanding under these facilities may become immediately due and payable, cash generated by our subsidiaries may be unavailable to us and/or we may be unable to draw additional amounts under these facilities. The Initial Portfolio financed by Genesis Funding’s securitization requires that Genesis Funding maintain a debt service coverage ratio from November 2009 through November 2011 above the threshold specified under this financing. If lessees of the aircraft held by Genesis Funding default under their leases, then Genesis Funding may be unable to comply with this

covenant and all available cashflow from the Initial Portfolio will be applied to the repayment of the securitization notes. Genesis Portfolio’s term loan facility requires that Genesis Portfolio maintain a loan-to-value ratio (tested annually) below the threshold specified in the facility. If aircraft values decline, then Genesis Portfolio may be unable to comply with this covenant and would be required to prepay outstanding borrowings to restore compliance with the covenant; otherwise, the amounts outstanding under the term loan facility would become immediately due and payable. Genesis Acquisition’s revolving credit facility requires that Genesis Acquisition maintain minimum ratios of earnings before interest, taxes, depreciation and amortization (“EBITDA”) to interest expense and a loan-to-value ratio (tested semi-annually) below the threshold specified in the revolving credit facility in respect of any aircraft financed through the revolving credit facility. As at December 31, 2008 there were no aircraft financed through Genesis Acquisition’s revolving credit facility. However, to the extent aircraft are financed in the future and subsequently aircraft values decline and/or if lessees default under their leases, then Genesis Acquisition may be unable to comply with the covenants and could lose the ability to make further borrowings under the revolving credit facility. The events that could cause our subsidiaries not to be in compliance with their financial covenants — such as a decline in aircraft values or lessee defaults — may be beyond our control, but they nevertheless could have a substantial adverse impact on the amount of our cash flow available to fund working capital, make capital expenditures and satisfy other needs, including payments of dividends to shareholders.

For a description of the operating and financial restrictions in our debt facilities, see Item 5.B. “Liquidity and Capital Resources.”

We may not be able to refinance the notes issued in the securitization on favorable terms or at all, which may require us to seek more costly or dilutive financing for our investments or to liquidate assets.

We currently intend to refinance the notes that Genesis Funding issued in the securitization through a long-term financing prior to December 2011. After December 2011 if we have not refinanced the notes, we will be required to apply all of the available cash flow from our Initial Portfolio of 41 aircraft to repay the principal on the notes. We bear the risk that we will not be able to refinance our existing indebtedness on favorable terms or at all. The inability to refinance our securitization indebtedness may require us to seek more costly or dilutive financing for our aircraft or to liquidate assets.

Most of our debt obligations are subject to interest rate risk.

The majority of our long-term debt has floating interest rates, which subjects us to the risk of an increase in interest rates and to the risk that our cash flows may be insufficient to make scheduled interest payments if interest rates were to increase. To limit the risks of interest rate fluctuations, we have entered into interest rate swaps. If any counterparty to the interest rate swaps were to default on its obligations, then a mismatch in the floating rate interest obligations and fixed rate lease payments may arise. This could impair our subsidiaries’ ability to make distributions to us, which could, in turn, adversely affect our ability to meet our financial obligations.

We may not be able to pay or maintain dividends on our shares. The failure to do so would adversely affect the trading price of our shares.

There are a number of factors that could affect our ability to pay dividends, including but not limited to the following:

	•		lack of availability of cash to pay dividends due to changes in our operating cash flow, capital expenditure requirements, working capital requirements and other cash needs;
	•		our inability to refinance the notes that we have issued in the securitization before December 2011, when we will be required to apply all available cash flow from our Initial Portfolio to repay the principal amount thereof on a monthly basis;
	•		our inability to renew, extend or repay our debt facilities when due, which could prevent our subsidiaries from making any distributions to us;
	•		restrictions imposed by our financing arrangements, including under the notes issued in the securitization, our debt facilities and any indebtedness incurred in the future to refinance our existing debt or to expand our aircraft portfolio;
	•		application of funds to make and finance acquisitions of aircraft and other aviation assets;
	•		reduced levels of demand for, or value of, our aircraft;
	•		increased supply of aircraft;
	•		obsolescence of aircraft;
	•		lower lease rates on new aircraft and re-leased aircraft;
	•		delays in re-leasing our aircraft after the expiration or early termination of existing leases;
	•		impaired financial condition and liquidity of our lessees;
	•		deterioration of economic conditions in the commercial aviation industry generally;
	•		unexpected or increased fees and expenses payable under our agreements with GECAS and its affiliates and other service providers;
	•		poor performance by GECAS and its affiliates and other service providers and our limited rights to terminate them;
	•		unexpected or increased maintenance, operating or other expenses or changes in the timing thereof;
	•		a decision by our board of directors to modify or revoke its policy to distribute a portion of our cash flow available for distribution;
	•		changes in Irish tax law, the tax treaty between the United States and Ireland (the “Irish Treaty”) or our ability to qualify for the benefits of such treaty;
	•		restrictions under Bermuda law on the amount of dividends that we may pay; and
	•		the other risks discussed under this Item 3.D. “Risk Factors.”

The failure to maintain or pay dividends may adversely affect the trading price of our shares.

The death, incapacity or departure of senior management could harm our business and financial results.

Our future success depends to a significant extent upon our chief executive officer, John McMahon, our chief financial officer, Alan Jenkins, and our chief commercial officer, Cian Dooley. Mr. McMahon has substantial experience in the aviation industry, and his continued employment is crucial to the development of our business strategy and to the growth and development of our business. Mr. Jenkins and Mr. Dooley also have significant experience in the aviation industry on which we depend. If Mr. McMahon, Mr. Jenkins or Mr. Dooley were to die, become incapacitated for a short or long period, or leave our company, we may not be able to replace each of them, respectively, as the case may be, with another chief executive officer, chief financial officer or chief commercial officer with equivalent talent and experience, and our business, prospects, financial condition, results of operations and cash

flows may suffer. Because we have a limited staff, the impact of any of Mr. McMahon’s, Mr. Jenkins’s or Mr. Dooley’s departure could be severe on our business.

Risks Relating to Our Aircraft and Leases

The concentration of aircraft types in our portfolio could harm our business and financial results should any difficulties specific to these particular types of aircraft occur.

Of the aircraft in our portfolio, approximately 34.2% are Airbus A320-200 aircraft, approximately 31.9% are Boeing 737-800 aircraft and approximately 33.9% are various other aircraft. If any of these aircraft types (or other types that we acquire in the future) should encounter technical or other difficulties, such affected aircraft types may be subject to grounding or diminution in value and we may be unable to lease such affected aircraft types on favorable terms or at all. The inability to lease the affected aircraft types may reduce our revenues and net income to the extent the affected aircraft types comprise a significant percentage of our aircraft portfolio.

We will need to re-lease or sell aircraft as leases expire to continue to generate sufficient funds to meet our debt obligations, and finance our growth and operations. We may not be able to re-lease or sell aircraft on favorable terms, or at all.

Our business strategy entails the need to re-lease aircraft as our current leases expire to generate sufficient revenues to meet our financial obligations and finance our growth and operations. The ability to re-lease aircraft depends on general market and competitive conditions. Some of our competitors may have greater access to financial resources and, as a result of restrictions on us contained in the terms of our indebtedness, may have greater operational flexibility. If we are not able to re-lease an aircraft or to do so on favorable terms, we may attempt to sell the aircraft to provide funds for debt service or operating expenses. Our ability to re-lease or sell aircraft on favorable terms or without significant off-lease time could be adversely affected by depressed conditions in the airline and aircraft industries, airline bankruptcies, the effects of terrorism and war, the sale of other aircraft by financial institutions or other factors.

The advent of superior aircraft technology could cause our existing aircraft portfolio to become outdated and therefore less desirable, which could adversely affect our financial results and growth prospects and our ability to compete in the marketplace.

As manufacturers introduce technological innovations and new types of aircraft, including the Boeing 787 Dreamliner and the Airbus A350 XWB (currently scheduled to enter service in 2010 and 2013, respectively) and potential replacement types for the Boeing 737 and Airbus A320 families of aircraft, certain aircraft in our existing aircraft portfolio may become less desirable to potential lessees. In addition, although all of the aircraft in our portfolio are Stage 3 noise-compliant, the imposition of more stringent noise or emissions regulations may make certain of our aircraft less desirable in the marketplace. Any of these risks could adversely affect our ability to lease or sell our aircraft on favorable terms or at all or our ability to charge rental amounts that we would otherwise seek to charge.

Depreciation expenses and impairment charges could have a material adverse effect on our financial condition and results of operations.

Our aircraft have finite economic lives, their values depreciate in the ordinary course over time and their ability to generate earnings and cash flow for our business declines over time. If

depreciated aircraft are not replaced with newer aircraft, our ability to generate earnings will be reduced. We depreciate our aircraft for accounting purposes on a straight-line basis to the aircraft’s estimated residual value over its estimated useful life. If we dispose of an aircraft for a price that is less than its depreciated value, then we would be required to recognize a loss that would reduce our net income during the period of the disposition and reduce our total assets.

The aircraft in our portfolio and any other aircraft and other aviation assets that we acquire in the future are expected to be under operating leases that are subject to periodic review for impairment for accounting purposes. We believe the carrying value of the aircraft in our portfolio is currently recoverable through the cash flows expected to result from their use and eventual disposition. However, if these expected cash flows are adversely affected by factors including credit deterioration of a lessee, declines in rental rates, other market conditions and residual values, then we may be required to recognize impairment charges that would reduce our net earnings or increase our net losses. Under U.S. GAAP, once an impairment results in a reduction to the carrying value of an asset, the carrying value of such asset cannot thereafter be increased.

Aircraft liens could impair our ability to repossess, re-lease or sell our aircraft.

In the normal course of business, liens that secure the payment of airport fees and taxes, custom duties, air navigation charges, landing charges, crew wages, repairers’ charges, salvage or other obligations are likely, depending on the laws of the jurisdictions where aircraft operate, to attach to the aircraft (or, if applicable, to the engines separately). The liens may secure substantial sums that may, in certain jurisdictions or for limited types of liens (particularly fleet liens), exceed the value of any particular aircraft to which the liens have attached. Until they are discharged, the liens described above could impair our ability to repossess, re-lease or sell our aircraft.

Although financial obligations are the responsibilities of the lessees, if they fail to fulfill their obligations, liens may attach. In some jurisdictions, aircraft liens or separate engine liens may give the holder thereof the right to detain or, in limited cases, sell or cause the forfeiture of the aircraft (or, if applicable, the engines separately). We cannot assure you that the lessees will comply with their obligations under the leases to discharge liens arising during the terms of the leases. We may, in some cases, find it necessary to pay the claims secured by such liens in order to repossess the aircraft or obtain the aircraft or engines from a creditor thereof. These payments would be a required expense for us and would reduce our net income and our cash flows.

Some of the aircraft in our portfolio have been damaged and subsequently repaired.

Some of the aircraft in our portfolio have been damaged. Even though these aircraft have been repaired, we may not be able to resell or re-lease such aircraft on terms as favorable as those for an aircraft that has not been damaged.

Government regulations could require substantial expenditures, reduce our profitability and limit our growth.

Certain aspects of our business are subject to regulation and require the oversight and regulation by state, federal and foreign governmental authorities. Aircraft are subject to regulations imposed by aviation authorities regarding aircraft maintenance and airworthiness. Laws affecting the airworthiness of aircraft generally are designed to ensure that all aircraft

and related equipment are continuously maintained in proper condition to enable safe operation of the aircraft. Aircraft manufacturers may also issue their own recommendations. Airworthiness directives and similar requirements typically set forth particular special maintenance actions or modifications to certain aircraft types or models that the owners or operators of aircraft must implement.

Each lessee generally is responsible for complying with airworthiness directives with respect to its aircraft and is required to maintain the aircraft’s airworthiness. To the extent that a lessee fails to comply with airworthiness directives required to maintain its certificate of airworthiness or other manufacturer requirements in respect of an aircraft or if the aircraft is not currently subject to a lease, we may have to bear the cost of such compliance. Under many leases, we have agreed to share with our lessees the cost of obligations under airworthiness directives (or similar requirements). In addition, if the aircraft is not subject to a lease, we may be forced to bear (or, to induce a prospective lessee to take the aircraft on lease, have to agree to pay) the cost of compliance with airworthiness directives. These expenditures can be substantial, and, to the extent we are required to pay them, our cash flow could be substantially adversely affected.

In addition to these expenditures, which may be substantial, significant new requirements with respect to noise standards, emission standards and other aspects of our aircraft or their operation could cause our costs to increase and could cause the value of our aircraft portfolio to decrease. Other governmental regulations relating to noise and emissions levels may be imposed not only by the jurisdictions in which the aircraft are registered, possibly as part of the airworthiness requirements, but also by other jurisdictions where the aircraft operate. In addition, most countries’ aviation laws require aircraft to be maintained under an approved maintenance program having defined procedures and intervals for inspection, maintenance and repair. To the extent that our aircraft are off lease or a lessee defaults in effecting such compliance, we are required to comply with such requirements at our expense.

Various environmental regulations may cause lessees to default on their lease payment obligations to us.

Governmental regulations regarding aircraft and engine noise and emissions levels apply based on where the relevant aircraft is registered and operated. For example, jurisdictions throughout the world have adopted noise regulations which require all aircraft to comply with noise level standards. In addition to the current requirements, the United States and the International Civil Aviation Organization, or ICAO, have introduced new standards for noise levels which apply to newly certified aircraft types on or after January 1, 2006. Currently, there are no regulations that would require any phase-out of aircraft that qualify with the older standards applicable to engines manufactured or certified prior to January 1, 2006, but the European Union has established a framework for the imposition of operating limitations on aircraft that do not comply with the new standards. These regulations could limit the economic life of the aircraft and engines, reduce their value, limit our ability to lease or sell the non-compliant aircraft and engines or, if engine modifications are permitted, require us to make significant additional investments in the aircraft and engines to make them compliant.

In addition to more stringent noise restrictions, the United States and other jurisdictions are beginning to impose more stringent limits on nitrogen oxide, carbon monoxide and carbon dioxide emissions from engines, consistent with current ICAO standards. These limits

generally apply only to engines manufactured after 1999. Many of the aircraft engines owned by us were manufactured after 1999. Because aircraft engines are replaced from time to time in the usual course, it is likely that the number of such engines may increase over time. Concerns over global warming could result in more stringent limitations on the operation of aircraft powered by older, non-compliant engines.

European countries generally have relatively strict environmental regulations that can restrict operational flexibility and decrease aircraft productivity. The European Parliament has confirmed that aviation is to be included in the European Union’s Emissions Trading Scheme starting from 2012. This inclusion could possibly distort the European air transport market leading to higher ticket prices and ultimately a reduction in the number of airline passengers. As an answer to these concerns, European airlines have established the Committee for Environmentally Friendly Aviation to promote the positive environmental performance of airlines. The United Kingdom has doubled its air passenger duties, effective February 1, 2007, in recognition of the environmental costs of air travel. Similar measures may be implemented in other jurisdictions as a result of environmental concerns.

Compliance with current or future regulations, taxes or duties imposed to deal with environmental concerns could cause the lessees to incur higher costs and to generate lower net revenues, resulting in an adverse impact on their financial conditions. Consequently, such compliance may affect the lessees’ ability to make rental and other lease payments and reduce the value received for the aircraft upon any disposition, which could have an adverse effect on our ability to pay the interest on and principal of the securitization notes in full or on a timely basis.

It may be difficult or impossible to obtain title to two of the aircraft in our portfolio upon a bankruptcy or default by its owner and manager.

Two of the aircraft in our portfolio (with an aggregate net book value of $100.7 million as of December 31, 2008) are on lease to lessees based in Japan. Under Japanese law, legal title to each aircraft registered in Japan must be held by a Japanese entity. In order to permit the registration of these aircraft in Japan, legal title to the aircraft is held by third-party Japanese corporations owned and managed by one of the major trading companies in Japan. However, beneficial ownership of the aircraft is effectively held by entities in which the beneficial interest is held by us. Title to these aircraft will be transferred under the terms of a conditional sales agreement to such entities upon payment by such entities to the third-party Japanese owners of the remaining installment in the amount of one U.S. dollar on the date the lease of each aircraft expires or any earlier dates elected by such entities provided that (1) there is no continuing default by such entities and certain representations and warranties of such entities remain true and accurate and (2) the third-party Japanese owner is indemnified by the lessees for costs and taxes that arise as a result of the title transfer. Because we have not relinquished control over these aircraft upon transfer of title to the Japanese entities, as evidenced by the one dollar purchase option in the conditional sale agreement which is exercisable at any time, and we have retained all of the risks and rewards of ownership of the aircraft, we have not recognized these transactions as sales for accounting purposes and continue to recognize the aircraft as “Flight equipment under operating lease” in our financial statements.

While these liabilities are the responsibility of the lessee, if they are not paid, the entities holding the beneficial interest may effectively have to pay such amounts in order for title to be transferred. Under the conditional sale agreements, we effectively hold the beneficial

ownership interest of the aircraft, including all of the risks and rewards of ownership, and have full control over the leasing of the aircraft to the lessees, but full liability to the Japanese title owners with respect to the aircraft if the lessees do not perform their indemnity or other obligations. The obligations of the third-party Japanese owners to transfer title to such entities are secured by mortgages over the leased aircraft and share pledges over the entire share capital of the third-party Japanese owners, each in favor of such entities. Although the conditional sale agreements provides for title to transfer automatically, a bill of sale may be required to legally effect such transfer of title. There may be tax-related considerations or issues relating to the validity of the method of title transfer depending on the location of the aircraft (and the related engines) at the time of transfer that may need to be considered at the time of transfer and which may affect the decision as to when to transfer title. It is also possible that the Japanese title owners or their manager parent company could breach their obligation to provide a bill of sale to document properly the title transfer to us, which could also result in possible impairment of our ability to obtain such evidence of title to the aircraft in a timely fashion or at all.

In the event of a bankruptcy proceeding involving the Japanese manager of these aircraft, the separateness of the corporate existence of the Japanese owners of the aircraft and the Japanese manager may be disregarded and these aircraft, if the third-party Japanese owners still hold legal title to them, may be consolidated with the assets of the Japanese manager and may become part of the bankruptcy estate, resulting in the possible impairment of our ability to obtain title to these aircraft in a timely fashion or at all.

We rely on our lessees’ continuing performance of their lease obligations.

We operate as a supplier to airlines and are indirectly impacted by the risks facing airlines today. Our success depends upon the financial strength of our lessees, our ability to assess the credit risk of our lessees and the ability of lessees to perform their contractual obligations to us. The ability of each lessee to perform its obligations under its lease will depend primarily on the lessee’s financial condition and cash flow, which are affected by factors beyond our control. Some of our lessees may experience payment difficulties, particularly if economic conditions deteriorate. In addition, the demand for aircraft generally diminishes as they age, and the creditworthiness of the lessees of older aircraft is generally lower than the creditworthiness of the lessees of newer aircraft.

We are typically not in possession of an aircraft while it is on lease. Consequently, our ability to determine the condition of any aircraft or whether lessees are properly maintaining our aircraft is limited to periodic inspections that we perform or that are performed on our behalf by third-party service providers or aircraft inspectors. A lessee’s failure to meet its maintenance obligations under a lease could:

	•		result in a grounding of the aircraft;
	•		cause us to incur costs in restoring the aircraft to an acceptable maintenance condition to re-lease the aircraft;
	•		adversely affect lease terms in the re-lease of the aircraft; and
	•		adversely affect the value of the aircraft.

We cannot assure you that, in the event that a lessee defaults under a lease, any security deposit paid or letter of credit provided by the lessee will be sufficient to cover the lessee’s

outstanding or unpaid lease obligations and required maintenance expenses, or be sufficient to discharge liens that may have attached to our aircraft.

Lease defaults could result in significant expenses and loss of revenues.

If we are unable to agree upon acceptable terms for a lease restructuring, then we have the right to repossess aircraft and to exercise other remedies upon a lessee default. Repossession, re-registration and flight and export permissions after a lessee default typically result in greater costs than those incurred when an aircraft is returned at the end of a lease. These costs include legal expenses that could be significant, particularly if the lessee is contesting the proceedings or is in bankruptcy. Delays resulting from repossession proceedings would also increase the period of time during which an aircraft or other aviation asset does not generate rental revenue. In addition, we may incur substantial maintenance, refurbishment or repair costs that a defaulting lessee has failed to pay and that are necessary to put the aircraft in a condition suitable for re-lease or sale, and we may need to pay off liens, taxes and governmental charges on the aircraft or other aviation asset to obtain clear possession and to remarket the asset effectively.

If we repossess an aircraft or other aviation asset, we will not necessarily be able to export or deregister and profitably redeploy the asset. Where a lessee or other operator flies only domestic routes in the jurisdiction in which an aircraft is registered, repossession may be more difficult, especially if the jurisdiction permits the lessee or the other operator to resist deregistration. Significant costs may also be incurred in retrieving or recreating aircraft records required for registration of the aircraft and obtaining a certificate of airworthiness for the aircraft or other aviation assets.

Risks associated with the concentration of our lessees in certain geographical regions could harm our business.

Our business is exposed to local economic and political conditions that can influence the performance of lessees located in a particular region. The effect of these conditions on payments to us will be more or less pronounced, depending on the concentration of lessees in the region with adverse conditions.

European concentration. Lease rental revenues from lessees based in Europe accounted for 38.4% of total rental revenues for the year ended December 31, 2008. Commercial airlines in Europe face, and can be expected to continue to face, increased competitive pressures, in part as a result of the deregulation of the airline industry by the European Union and the development of low-cost carriers. European countries generally have relatively strict environmental regulations and traffic constraints that can restrict operational flexibility and decrease aircraft productivity, which could significantly increase aircraft operating costs.

Asian concentration. Lease rental revenues from lessees based in Asia (including China and India) accounted for 36.6% of total rental revenues for the year ended December 31, 2008. There are significant obstacles to the development of Chinese and Indian airline industries, including continuing government control and regulation over the industry. In addition, India faces poor aviation infrastructure and continuing losses from operations due to overcapacity. If these difficulties persist or expand, the Chinese and Indian airline industries likely would experience a significant decrease in growth or restrictions on future growth.

North American concentration. Lease rental revenues from lessees based in North America accounted for 13.8% of total rental revenues for the year ended December 31, 2008. During

the past 15 years a number of North American passenger airlines filed Chapter 11 bankruptcy proceedings and several major U.S. airlines ceased operations altogether. High labor costs, high fuel costs, the strength of labor unions in collective bargaining negotiations, the war and prolonged conflict in Iraq and the September 11, 2001 terrorist attacks in the United States have imposed additional financial burdens on most U.S. airlines.

The geographic classifications and revenue information for the lessees discussed above are based on the financial statements as of and for the year ended December 31, 2008, which are included at Item 18 in this Annual Report.

Because many of our lessees operate in emerging markets, we are indirectly subject to many of the economic and political risks associated with competing in such markets.

Emerging markets are countries which have developing economies that are vulnerable to business and political disturbances, such as significant economic instability, interest and exchange rate fluctuations, civil unrest, government instability and the nationalization or expropriation of private assets. The occurrence of any of these events in markets served by our lessees domiciled in emerging markets and the resulting instability may adversely affect our ownership interest in aircraft or the ability of lessees which operate in these markets to meet their lease obligations and these lessees may be more likely to default than lessees that operate in developed economies.

Some of our leases provide the lessees with early termination rights.

Ten of the leases in our portfolio provide the lessees with early termination rights. We also could enter into leases in the future that provide lessees with early termination rights. If any lease is terminated early at a time when we could not re-lease the aircraft at rates at least as favorable to us as the terminated lease, our results of operations could be adversely affected. See Item 4.D. “Property, Plants and Equipment—Our Leases—Early Termination Rights.”

We cannot assure you that all lessees will comply with the registration requirements in the jurisdictions where they operate.

All of our aircraft are required to be registered at all times with appropriate governmental authorities. Generally, in jurisdictions outside the United States, failure by a lessee to maintain the registration of a leased aircraft would be a default under the applicable lease, entitling us to exercise our rights and remedies thereunder. If an aircraft were to be operated without a valid registration, the lessee operator or, in some cases, the owner or lessor might be subject to penalties, which could constitute or result in a lien being placed on such aircraft. Failure to comply with registration requirements also could have other adverse effects, including inability to operate the aircraft and loss of insurance. We cannot assure you that all lessees will comply with these requirements.

Our lessees may have inadequate insurance coverage or fail to fulfill their respective indemnity obligations, which could result in us not being covered for claims asserted against us and may negatively affect our business, financial condition and results of operations.

Although we do not expect to control the operation of our leased aircraft, our ownership of the aircraft could give rise, in some jurisdictions, to strict liability for losses resulting from their operation. Our lessees are required to indemnify us for, and insure against, liabilities arising out of the use and operation of the aircraft, including third-party claims for death or injury to persons and damage to property for which we may be deemed liable. Lessees are also required to maintain public liability, property damage and hull all risks and hull war risks insurance on

the aircraft at agreed upon levels. However, they are not generally required to maintain political risk insurance.

Following the terrorist attacks of September 11, 2001, aviation insurers significantly reduced the amount of insurance coverage available to airlines for liability to persons other than employees or passengers for claims resulting from acts of terrorism, war or similar events. At the same time, they significantly increased the premiums for such third-party war risk and terrorism liability insurance and coverage in general. As a result, the amount of such third-party war risk and terrorism liability insurance that is available at any time may be below the amount required under the initial leases and required by the market in general.

We cannot assure you that the insurance maintained by our lessees will be sufficient to cover all types of claims that may be asserted against us. Any inadequate insurance coverage or default by lessees in fulfilling their indemnification or insurance obligations, as well as the lack of available insurance, could reduce the proceeds upon an event of loss and could subject us to uninsured liabilities, either of which could adversely affect our business, financial condition and results of operations.

Risks Related to Our Relationships with GECAS, Its Affiliates and Other Service Providers

We depend on GECAS to service our portfolio and additional aircraft that we acquire in the future.

We were formed in 2006 and had 21 permanent employees as of December 31, 2008, as well as 2 consultants who work with us on a contract basis. Our business strategy involves outsourcing our servicing and remarketing of aircraft to GECAS. Our initial business operations consisted of owning and leasing a portfolio of aircraft acquired from affiliates of GE. These aircraft assets were previously owned, managed and leased by GE and its affiliates as part of their larger aircraft leasing enterprise. We do not have the same infrastructure as GECAS to support these aircraft assets, and we continue to rely on GECAS for the servicing of our aircraft. Pursuant to our servicing agreements, GECAS provides us with a variety of services, including collecting rents and other payments from the lessees of our aircraft, monitoring maintenance, insurance and other obligations under our leases, enforcing rights against lessees, remarketing aircraft for re-lease or sale and other aircraft-related services. GECAS has a high level of autonomy in its servicing of our aircraft, and our operational success, revenues, aircraft and lease related costs and ability to execute our growth strategy depend significantly on GECAS’s satisfactory performance of these services. GECAS’s failure to perform these services satisfactorily would significantly impair our ability to maximize our lease or sale income, monitor our lessees’ compliance with their lease obligations and/or comply with our contractual obligations under our leases. Our rights to terminate the servicing agreements are limited. In particular, we have no right to terminate GECAS as servicer simply because it is performing unsatisfactorily. See “— Even if we are dissatisfied with GECAS’s performance, there are only limited circumstances under which we will be able to terminate the servicing agreements and we may not terminate the servicing agreement for our Initial Portfolio without the prior written consent of the policy provider.” Similarly, under certain financing agreements, we may not terminate the servicing agreement without the prior consent of the lenders.

GECAS is not obligated to service all aircraft that we acquire in the future. The servicing agreements provide that GECAS may decline to accept newly acquired aircraft for servicing for a number of specified reasons. See Item 10.C. “Additional Information—Material

Contracts—Servicing Agreements.” For example, GECAS may decline to service an aircraft if a bank lender that finances such aircraft imposes conditions on the servicing of such aircraft to which GECAS does not agree. If GECAS declines to service any aircraft we acquire in the future, we will need to find a replacement servicer for such aircraft. The quality of any replacement services may not be as high or provided on terms as favorable as the terms currently offered by GECAS.

In addition, if any of the servicing agreements were to be terminated, or if their terms were to be altered, we will not be entitled to benefit from certain terms of the leases, such as cross-defaults and various insurance terms, which apply only if GECAS is the servicer, and we may not be able to replace these services promptly. If we are unable to maintain a strong, positive relationship with GECAS, our business, financial condition, results of operations and cash flows could be materially and adversely affected.

GECAS and its affiliates may have conflicts of interest with us, and their limited contractual or other duties may not restrict them from favoring their own business interests to our detriment.

Conflicts of interest may arise between us and GECAS, as the servicer for our aircraft, with respect to our operations and business opportunities. These conflicts may arise because GECAS manages and remarkets for lease or sale aircraft for us, itself, its affiliates and for many other entities. GECAS also has extensive information about our business and operations as a result of the continued servicing of our aircraft, including access to sensitive competitive information such as lease and aircraft pricing, whereas we do not have access to similar information with respect to GECAS. If a conflict of interest arises as to one of our aircraft and other aircraft managed by GECAS, the servicing agreements provide that GECAS must perform the services in good faith, and, to the extent that either two or more of our particular aircraft or one of our aircraft and other aircraft managed by GECAS have substantially similar objectively identifiable characteristics that are relevant for purposes of the particular services to be performed, GECAS has agreed not to discriminate among our aircraft or between any of our aircraft and any other managed aircraft on an unreasonable basis. Nevertheless, despite these contractual undertakings, GECAS may favor its own interests and the interests of other managed entities over our interests.

Conflicts may arise, for example, when our aircraft are leased to entities that also lease other aircraft owned or managed by GECAS and decisions affecting some aircraft may have an adverse impact on others. For example, when a lessee in financial distress seeks to return some of its aircraft, GECAS will be required to decide which aircraft to accept for return and may favor its or another managed entity’s interest over ours. Conflicts also may arise when our aircraft are being marketed for re-lease or sale at a time when other aircraft owned or managed by GECAS are being similarly marketed. These conflicts may be especially pronounced when an affiliate of GECAS is providing financing for a lessee or for the marketed aircraft or where GECAS’s contractual arrangements with a third party have the effect of requiring preferential treatment for other aircraft.

Under the terms of our servicing agreements with GECAS, we are not entitled to be informed of all conflicts of interest involving GECAS and are limited in our right to replace GECAS because of conflicts of interest. Any replacement servicer may not provide the same quality of service or may not afford us terms as favorable as the terms currently offered by GECAS. Moreover, in certain situations we may incur duplicative servicing fees for services we obtain when there is a conflict of interest. If GECAS, as the servicer, makes a decision that is adverse

to our interests, our business, financial condition, results of operations and cash flows could suffer. See “—Even if we are dissatisfied with GECAS, there are only limited circumstances under which we will be able to terminate the servicing agreements and we may not terminate the servicing agreement for our Initial Portfolio without the prior written consent of the policy provider.”

Our servicing agreements limit our remedies against GECAS for unsatisfactory performance and provide certain termination rights to the policy provider.

Under our servicing agreements with GECAS, in many cases we may not have the right to recover damages from GECAS for unsatisfactory performance. In addition, although GECAS is subject to standards of care and conflicts as provided in the servicing agreements, GECAS is not contractually responsible for:

	•		the transfer of aircraft, leases or other assets to our company;
	•		determining the adequacy of the terms of any aircraft lease, including rent payments or security deposits;
	•		determining the reliability or creditworthiness of any lessee; or
	•		our compliance with the terms of our agreements with other parties, including the indenture for the securitization and our credit facility.

We have agreed to indemnify GECAS and its affiliates for broad categories of losses arising out of the performance of services for our aircraft and leases, unless they are finally adjudicated to have been caused directly by GECAS’s gross negligence or willful misconduct (including willful misconduct that constitutes fraud) in respect of GECAS’s obligation to apply its standard of care or conflicts standard in the performance of its services. We have also agreed to indemnify GECAS and its affiliates for losses arising out of the disclosures in this Annual Report (except certain disclosures provided to us by GECAS and losses arising out of our compliance with our obligations to any holders of any securities issued by us or any of our subsidiaries or any governmental authorities).

Under certain circumstances the provider of the financial guarantee insurance policy with respect to the securitization notes has the right to terminate GECAS as the servicer for our Initial Portfolio without our consent and may terminate GECAS at a time which may be disadvantageous to us.

Even if we are dissatisfied with GECAS’s performance, there are only limited circumstances under which we will be able to terminate the servicing agreements and we may not terminate the servicing agreement for our Initial Portfolio without the prior written consent of the policy provider.

We have the right to terminate any servicing agreement with GECAS (except in the case of the servicing agreement for our Initial Portfolio, which also requires the prior written consent of the policy provider and under certain financings which require lender consent) if, among other things,

	•		GECAS ceases to be at least majority-owned directly or indirectly by General Electric Capital Corporation, or GE Capital, or its ultimate parent, GE;
	•		GECAS fails in any material respect to perform any material services under the servicing agreements which results in liability of GECAS due to its gross negligence or willful misconduct (including willful misconduct constituting fraud) in respect of its obligation to apply the standard of care or conflicts standard in respect of performance of the services in a manner that is materially adverse to us and our applicable subsidiaries taken as a whole;

	•		GECAS fails in any material respect to perform any material services under the servicing agreements in accordance with the standard of care or the conflicts standard in a manner that is materially adverse to us and our applicable subsidiaries taken as a whole;
	•		GECAS, GE Capital or GE becomes subject to bankruptcy or insolvency proceedings;
	•		with respect to the master servicing agreement, we have insufficient funds for the payment of certain dividends while a significant portion of our available aircraft remain off-lease for a specified period;
	•		with respect to the servicing agreement for our Initial Portfolio, we have insufficient funds for the payment of interest on the notes for a period of at least 60 days;
	•		with respect to the servicing agreement for our Initial Portfolio, at least 15% of the number of aircraft assets remain off-lease but available for re-lease for a period of at least three months following specified events set forth in the trust indenture; or
	•		with respect to the servicing agreement for our Initial Portfolio, without limiting GECAS’s rights under the security trust agreement, GECAS takes any steps for the purpose of processing the appointment of an administrative receiver or the making of any administrative order or for instituting a bankruptcy, reorganization, arrangement, insolvency, winding up, liquidation, composition or any similar proceeding under the laws of any jurisdiction with respect to any person in the Genesis Funding, and any of its subsidiaries, or any of the aircraft assets.

In addition, in the case of the servicing agreement for our Initial Portfolio, the policy provider also has the right to terminate such servicing agreement under the circumstances described above.

In the absence of any of these events, neither we nor the policy provider has a right to terminate any servicing agreement, even if we are or it is dissatisfied with GECAS’s performance. In addition, because of our substantial dependence on GECAS, our board of directors may be reluctant to initiate litigation against GECAS to enforce contractual rights under any servicing agreement.

GECAS may resign under any servicing agreement with respect to all aircraft serviced thereunder or any affected aircraft, as the case may be, if it reasonably determines that directions given, or services required, would, if carried out, be unlawful under applicable law, be in violation of any GE corporate policy regarding business practices or legal, ethical or social matters, be likely to lead to an investigation by any governmental authority of GECAS or its affiliates, expose GECAS to liabilities for which, in GECAS’s good faith opinion, adequate bond or indemnity has not been provided or place GECAS in a conflict of interest with respect to which, in GECAS’s good faith opinion, GECAS could not continue to perform its obligations under the servicing agreements with respect to all serviced aircraft or any affected aircraft, as the case may be (but with respect to the foregoing circumstances, GECAS may resign only with respect to the affected aircraft). Whether or not it resigns, GECAS is not required to take any action of the foregoing kind. GECAS may also resign if it becomes subject to taxes for which we do not indemnify GECAS. GECAS’s decision to resign under any servicing agreement would significantly impair our ability to re-lease or sell our aircraft and service our leases.

We may compete with GECAS for acquisitions and dispositions of aircraft as well as the re-leasing of our aircraft that are not serviced by GECAS.

We may compete with GECAS in the market for aircraft acquisitions and dispositions and in re-leasing any of our aircraft that GECAS does not service. Currently, GECAS manages a fleet of approximately 1800 aircraft owned by its affiliates and by other entities with 28 offices and over 270 customers in 78 countries and thus has considerably greater scale than we have. GECAS also has extensive information about our business and operations as a result of the continued servicing of our aircraft, including access to sensitive competitive information such as lease and aircraft pricing, whereas we do not have access to similar information with respect to GECAS. In addition, GECAS has significantly greater financial resources than we have. As a result, we are likely to be at a competitive disadvantage to GECAS as we seek to acquire or dispose of aircraft or to re-lease any of our aircraft that GECAS does not service.

The terms of certain agreements with GECAS and other affiliates of GE were negotiated without independent assessment on our behalf, and these terms may be less advantageous to us than if they had been the subject of arm’s-length negotiations.

     In connection with our IPO, we entered into various agreements with GECAS and other affiliates of GE that effected the transactions relating to our formation, the securitization, the acquisition of our Initial Portfolio and our ongoing operations and business. Although the pricing and other terms of these agreements were reviewed by our management and our board of directors, they were determined by GE-affiliated entities in the overall context of our IPO and the related transactions. As a result, provisions of these agreements may be less favorable to us than they might have been had they been the result of arm’s-length transactions among unaffiliated third parties.

Risks Related to Our Financial Information

The historical financial information included in this Annual Report for periods prior to December 19, 2006, the completion of our IPO, does not reflect the financial condition, results of operations or cash flows we would have achieved during the periods presented as a stand-alone company, and therefore may not be a reliable indicator of our future financial performance.

We completed our IPO and commenced independent operations on December 19, 2006. As a result, we have a limited independent operating history, and our prospects must be considered in light of the risks, expenses and difficulties frequently encountered when any new business is formed. The historical financial information included in this Annual Report for periods prior to December 19, 2006 (the date of our IPO) does not reflect the financial condition, results of operations or cash flows that we would have achieved as a stand-alone company during the periods presented or that we will achieve in the future. This is primarily a result of the following factors:

•

The historical combined financial information included in this Annual Report for periods prior to our IPO does not reflect our ongoing cost structure, management, financing costs or business operations. Instead, this combined financial information represents the combination of results attributable to some of the aircraft included in our Initial Portfolio of 41 aircraft as owned, managed, financed and operated by GECAS and its affiliates. Following our acquisition of the Initial Portfolio, the cost of financing and operating these aircraft has changed due to:

•

the fact that the historical combined financial information for periods prior to the completion of our IPO reflects allocations of corporate expenses from affiliates of

GE and GECAS to our Initial Portfolio. These allocations are different from the comparable expenses we incur as a stand-alone public company due to a number of factors, including the likelihood that we are not able to realize economies-of-scale and negotiating leverage achieved by GE and GECAS;

	•		the need for additional personnel and service providers to perform services previously provided by GECAS and other affiliates of GE;
	•		legal, accounting, compliance and other costs associated with being a public company with listed equity, including compliance with the Sarbanes-Oxley Act of 2002 and rules subsequently implemented by the Securities and Exchange Commission, or the SEC, and the New York Stock Exchange, or the NYSE; and
	•		the fact that the historical combined financial information prior to our IPO reflects only the number of aircraft included in our Initial Portfolio owned by affiliates of GE for the periods or as of the dates specified therein, rather than all of the aircraft currently included in our portfolio.

	•		Our predecessor’s working capital requirements were satisfied as part of GE’s corporate-wide cash management policies. Although we have access to a credit facility for the acquisition of additional aircraft, we may not be able to obtain financing on terms as favorable as our predecessor obtained from or through GE and our cost of debt will likely be higher.
	•		The depreciation of capitalized major maintenance costs and our maintenance expenses are higher than reflected in the historical combined financial information due to the aging of our aircraft.
	•		Our effective tax rate is lower than our predecessor’s as a result of our tax residency in Ireland. Our cash tax payments are also lower as a result of our ability to depreciate aircraft under Irish tax law over eight years, which is a more accelerated rate than our predecessor used to depreciate aircraft under U.S. tax law.

Our subsidiaries in many cases have owned their aircraft prior to our acquisition of them and may have unknown contingent liabilities that we may be required to fund.

There is a risk that our subsidiaries, many of which have owned their aircraft in our portfolio prior to our acquisition of such subsidiaries, could have material contingent liabilities that are unknown to us and that were incurred by third parties from operating and leasing the aircraft in our portfolio or for other reasons.

Affiliates of GE, from which we acquired certain aircraft in our portfolio, have made representations and warranties relating to:

	•		the existence of a valid and final transfer of the beneficial interests of entities that hold the aircraft or entities that hold the beneficial interests of any such entities and that were sold to us by affiliates of GE;
	•		the title of our aircraft-owning subsidiaries to the applicable aircraft; and
	•		the lack of additional liabilities of our aircraft-owning subsidiaries or liens on the aircraft other than disclosed to us or otherwise permitted.

These representations and warranties are subject to time limits. If a liability arises and we are called on to pay it but are not able to recover any amount from the sellers for such liability, our liquidity could decrease significantly.

Risks Related to the Ownership of Our Shares

Market interest rates may have an effect on the trading value of our shares.

One of the factors that investors may consider in deciding whether to buy or sell our shares is our dividend rate as a percentage of our share price relative to market interest rates. If market interest rates increase, prospective investors may demand a higher dividend yield on our shares or seek alternative investments paying higher dividends or interest. As a result, interest rate fluctuations and capital market conditions can affect the market value of our shares. For instance, if interest rates rise, the market price of our shares may decrease as market rates on interest-bearing securities, such as bonds, increase.

We have anti-takeover provisions in our bye-laws that may discourage a change of control.

Our bye-laws contain provisions that could make it more difficult for a third party to acquire us without the consent of our board of directors. These include:

	•		provisions that permit us to require any competitor of GECAS that acquires beneficial ownership of more than 10% of our common shares either to tender for all of our remaining common shares for no less than their fair market value, or sell such number of common shares to us or to third parties as would reduce its beneficial ownership to less than 10%, in either case within 90 days of our request to so tender or sell;
	•		provisions that reduce the vote of each common share held by a competitor of GECAS that beneficially owns 10% or more, but less than 50%, of our common shares to one-fifth of one vote per share on all matters upon which shareholders may vote;
	•		provisions that permit our board of directors to determine the powers, preferences and rights of our preference shares and to issue such preference shares without shareholder approval;
	•		advance notice requirements by shareholders for director nominations and actions to be taken at annual meetings; and
	•		no provision for cumulative voting in the election of directors, such that all the directors standing for election may be elected by our shareholders by a plurality of votes cast at a duly convened annual general meeting, the quorum for which is two or more persons present in person or by proxy at the start of the meeting and representing in excess of 50% of all votes attaching to all shares in issue entitling the holder to vote at the meeting.

These provisions may make it difficult and expensive for a third party to pursue a tender offer, change in control or takeover attempt that is opposed by our management and/or our board of directors. Public shareholders who might desire to participate in these types of transactions may not have an opportunity to do so. These anti-takeover provisions could substantially impede the ability of public shareholders to benefit from a change in control or change our management and board of directors and, as a result, may adversely affect the market price of our shares and your ability to realize any potential change of control premium.

We are a Bermuda company that is managed and controlled in Ireland. It may be difficult for investors to enforce judgments against us or against our directors and executive officers.

We were incorporated under the laws of Bermuda and are managed and controlled in Ireland. Our business is based outside the United States, a majority of our directors and officers, and some of the experts named in this Annual Report, reside outside the United States and a

majority of our assets and some or all of the assets of such persons are located outside the United States. As a result, it may be difficult or impossible to effect service of process within the United States upon us or those persons, or to recover against us or them on judgments of U.S. courts, including judgments predicated upon the civil liability provisions of the U.S. federal securities laws. Further, no claim may be brought in Bermuda or Ireland against us or our directors and officers in the first instance for violation of U.S. federal securities laws because these laws have no extraterritorial application under Bermuda or Irish law and do not have force of law in Bermuda or Ireland. However, a Bermuda or Irish court may impose civil liability, including the possibility of monetary damages, on us or our directors and officers if the facts alleged in a complaint constitute or give rise to a cause of action under Bermuda or Irish law.

There is doubt as to whether the courts of Bermuda or Ireland would enforce judgments of U.S. courts obtained in actions against us or our directors and officers, as well as the experts named herein, predicated upon the civil liability provisions of the U.S. federal securities laws, or entertain actions brought in Bermuda or Ireland against us or such persons predicated solely upon U.S. federal securities laws. Further, there is no treaty in effect between the United States and Bermuda or Ireland providing for the enforcement of judgments of U.S. courts in civil and commercial matters, and there are grounds upon which Bermuda or Irish courts may decline to enforce the judgments of U.S. courts. Some remedies available under the laws of U.S. jurisdictions, including some remedies available under the U.S. federal securities laws, may not be allowed in Bermuda or Irish courts as contrary to public policy in Bermuda or Ireland. Because judgments of U.S. courts are not automatically enforceable in Bermuda or Ireland, it may be difficult for you to recover against us or our directors and officers based upon such judgments.

Shareholders of our company may have greater difficulties in protecting their interests than shareholders of U.S. corporations.

The Companies Act 1981 of Bermuda, as amended, which we refer to as the “Companies Act,” applies to our company and differs in material respects from laws generally applicable to U.S. corporations and their shareholders. Taken together with the provisions of our bye-laws, some of these differences may result in greater difficulties in protecting the interests of shareholders of our company than of shareholders of a U.S. corporation. This affects, among other things, the circumstances under which transactions involving an interested director are voidable, whether an interested director can be held accountable for any benefit realized in a transaction with our company, what approvals are required for business combinations by our company with a large shareholder or a wholly-owned subsidiary, what rights shareholders may have to enforce specified provisions of the Companies Act or our bye-laws, and the circumstances under which we may indemnify our directors and officers.

Risks Related to Taxation

We are a passive foreign investment company, or PFIC. Unless U.S. holders of our shares make certain elections under U.S. federal income tax rules, they are subject to certain adverse U.S. federal income tax rules.

Because we are a PFIC, U.S. holders of our shares are subject to certain adverse U.S. federal income tax rules. Under the PFIC rules, a U.S. holder who disposes or is deemed to dispose of

our shares at a gain, or who receives or is deemed to receive certain distributions with respect to our shares, generally will be required to treat such gain or distributions as ordinary income and pay an interest charge on the tax imposed. Certain elections may be used to reduce or eliminate the adverse impact of the PFIC rules for holders of our shares (“QEF elections” and “mark-to-market” elections), but these elections may accelerate the recognition of taxable income and may result in the recognition of ordinary income in excess of amounts distributed to you. In addition, because we are a PFIC, our distributions will not qualify for the reduced rate of U.S. federal income tax that applies to qualified dividends paid to non-corporate U.S. taxpayers. The PFIC rules are extremely complex, and prospective U.S. investors are urged to consult their own tax advisers regarding the potential consequences to them of our being classified as a PFIC. See Item 10.E. “Taxation Considerations—U.S. Federal Income Tax Considerations—Taxation of U.S. Holders of Shares.”

We may fail to qualify for tax treaty benefits and U.S. statutory tax exemptions which would reduce our net income and cash flow by the amount of the applicable tax.

Special U.S. tax rules apply to U.S. source transportation income. U.S. source gross rental income that is not connected with a U.S. trade or business may be subject to 30% withholding tax. Alternatively, certain U.S. source rental income could be subject to a 4% tax on gross transportation income. U.S. source transportation income connected with a U.S. trade or business would be taxed on a net basis. In order for us to be exempt from U.S. federal income taxation on all categories of U.S. source rental income, we and our Irish tax resident subsidiaries must qualify for benefits of the Irish Treaty. Qualification for Irish Treaty benefits depends on many factors, including that at least 50% of the vote and value of each of our Irish tax resident subsidiaries continues to be held by us and that our principal class of shares be substantially and regularly traded on one or more recognized stock exchanges. We may not satisfy all the requirements of the Irish Treaty and thereby may not qualify each year for the benefits of the Irish Treaty. Failure to so qualify could result in the income attributable to aircraft used for flights to, from or within the United States being subject to U.S. federal income taxation. The imposition of such taxes would adversely affect our business and would reduce cash available for distribution to our shareholders. See Item 10.E. “Taxation Considerations—U.S. Federal Income Tax Considerations—Taxation of Genesis Lease Limited and Our Subsidiaries”. In addition, we cannot assure you that the Double Taxation Agreement between Ireland and the United States would not be re-negotiated in the future and the current tax treaty benefits may no longer be available.

We may become subject to income or other taxes in the jurisdictions in which our aircraft operate, where our lessees are located or where we perform certain services which would adversely affect our business and reduce cash available for distributions to shareholders.

We and our Irish tax resident subsidiaries are subject to the income tax laws of Ireland. In addition, we may be, or become, subject to income or other taxes in other jurisdictions by reason of our activities and operations or those of our service providers, where our aircraft operate or where the lessees of our aircraft (or others in possession of our aircraft) are located. The imposition of such taxes would adversely affect our business and would reduce earnings available for distribution to our shareholders.

In addition, because Ireland does not have tax treaties with all jurisdictions, we may find it necessary to establish subsidiaries in other jurisdictions to lease or sublease aircraft to customers in those jurisdictions. Such subsidiaries may be subject to taxation in the

jurisdictions in which they are organized, which would reduce our net income and have an adverse impact on our cash flow available for distribution to our shareholders.

The tax rate applicable to us and our Irish tax resident subsidiaries would be higher than we expect if we or they were considered not to be carrying on a trade in Ireland for the purposes of Irish law.

Because we are managed and controlled in Ireland, we and our Irish resident subsidiaries are subject to Irish corporation tax on our net trading income at the rate of 12.5%. Under Irish tax law, non-trading income is taxed at the rate of 25% and capital gains are taxed at the rate of 22%. Each of us intend to carry on sufficient activity in Ireland, directly and indirectly, through a servicer, so as to be treated as carrying on a trade in Ireland for the purposes of Irish tax law. In calculating our net trading income we deduct tax depreciation on the aircraft. Whether we and our Irish tax-resident subsidiaries are carrying on a trade for the purposes of Irish tax are questions of fact and we cannot assure you that we or they will qualify, and we will depend on the Irish Revenue authorities accepting that we are engaged in an active business in Ireland.

One of the grounds for our Irish tax resident subsidiaries being treated as engaged in an active business in Ireland is that GECAS, as servicer for the Initial Portfolio, is an Irish company, and GECAS performs a major part of its obligations under the servicing agreement for the Initial Portfolio in Ireland. However, the servicing agreement does not require that GECAS perform any of its obligations in Ireland, and GECAS could relocate its operations in the future and not perform any such obligations in Ireland. If that happens, the Irish Revenue Authorities may reexamine the eligibility of our Irish tax resident subsidiaries for the 12.5% tax rate, and, if they were found to be not engaged in an active business in Ireland, all of their net income from leasing would be subject to the higher Irish corporate tax rate of 25%. As a result, our Irish tax resident subsidiaries would be liable earlier and in greater amounts for tax on such income.

If we or any of our Irish tax resident subsidiaries were considered not to be carrying on a trade in Ireland, we or they may be subject to additional Irish tax liabilities. The application of a higher tax rate (25% instead of 12.5%) on taxable income could reduce the cash flow available for distribution to our shareholders. In addition, we cannot assure you that the 12.5% tax rate applicable to trading income, the 22% tax rate applicable to capital gains or the 25% tax rate applicable to non-trading income will not be changed in the future.

Item 4. Information on the Company

A. History and Development of the Company

We are Genesis Lease Limited, a Bermuda exempted company incorporated on July 17, 2006 under the provisions of Section 14 of the Companies Act 1981 of Bermuda. Our registered office is located at Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda. Although we are organized under the laws of Bermuda, we are resident in Ireland for Irish tax purposes and thus are subject to Irish corporation tax on our income in the same way, and to the same extent, as if we were organized under the laws of Ireland. Our principal executive offices are located at 4450 Atlantic Avenue, Westpark, Shannon, Co. Clare, Ireland. Our telephone number at that address is +353 61 233 300.

We were formed at the direction of GECAS to acquire our Initial Portfolio from affiliates of GE and to develop an independent aircraft leasing business. On December 19, 2006, we (1) completed our IPO and issued 27,860,000 shares at a public offering price of $23.00 per share, (2) issued 3,450,000 shares to an affiliate of GE, in a private placement, for a price of $23.00 per share, (3) issued $810.0 million of aircraft lease-backed notes as part of a securitization transaction, and (4) used the net proceeds of the IPO, the private placement and the securitization to finance the acquisition of our Initial Portfolio of 41 commercial aircraft from affiliates of GE.

The purchase price for our Initial Portfolio was $1,459.4 million, which was the sum of the net proceeds of our IPO, our private placement and the securitization, less the portion of such proceeds that was used to fund our formation and offering-related expenses, up-front costs and expenses related to our securitization, and a cash balance of $20.0 million that we retained for general corporate purposes.

On January 16, 2007, we sold 4,179,000 additional shares at a public offering price of $23.00 after the underwriters of our IPO exercised their over-allotment option in full, as well as 517,500 additional shares at a price of $23.00 per share in a private placement to GE.

     Since our IPO, we have increased our portfolio by 13 aircraft from 41 to 54 aircraft. Twelve aircraft were purchased during the year ended December 31, 2007, eight from GECAS affiliates and four from two airlines on a sale and leaseback basis. One further aircraft was purchased from a GE affiliate during the year ended December 31, 2008.

B. Business Overview

Our Company

We are an aviation company that acquires and leases commercial jet aircraft and other aviation assets. Our aircraft are leased under long-term contracts to a diverse group of airlines throughout the world. We leverage the worldwide platform of GECAS to service our portfolio of leases, allowing our management to focus on executing our growth strategy. Our strategy is to grow our portfolio through acquisitions of aircraft from third parties, such as airlines and financial investors.

The aircraft in our portfolio are modern, operationally efficient passenger and cargo jet aircraft that have long expected remaining useful lives. As at December 31, 2008, the weighted average age of our aircraft was 6.6 years, and the weighted average remaining lease term on our aircraft was 4.5 years. As at December 31, 2008, four of our aircraft were non-revenue generating and on the ground. Our aircraft are subject to net operating leases under which the lessee is responsible for most operational and insurance costs, and 45 of the 50 leases in our

portfolio are subject to fixed rental rates. Others have floating rate rentals based on six-month LIBOR. The terms of our leases provide us with a stable source of revenues and cash flows. Our long-term agreements with GECAS enable our management team to focus primarily on pursuing acquisitions of additional aircraft and other aviation assets. Pursuant to such arrangements, GECAS provides us with most services related to leasing our fleet, including marketing aircraft for lease and re-lease, collecting rents and other payments from the lessees of our aircraft, monitoring maintenance, insurance and other obligations under our leases and enforcing rights against lessees.

     We believe we can continue to capitalize on the overall size and growth of the global aircraft market by acquiring and leasing additional aircraft. According to Airline Monitor, between 1998 and 2007, global passenger traffic, measured in revenue passenger miles, increased by 52%, or 4.9% per year. According to data from Ascend, as of December 2008, the current world commercial jet fleet consisted of more than 21,600 aircraft, and Boeing forecasts that the world fleet will reach 35,800 aircraft by 2027. Over the past 20 years, the world’s airlines have leased a growing share of their aircraft instead of owning them outright, and, according to market data, the proportion of the global fleet under operating lease has increased from 17% in 1990 to approximately 30% in recent years and may reach 40% over the next ten years. We believe these industry trends provide a large and growing available pool of aircraft and other aviation assets to acquire and lease in the future.

GECAS, the commercial aircraft financing and leasing businesses of GE Capital, is a leading global player in commercial aircraft leasing and financing, with over 1,800 owned and managed aircraft, 28 offices, and over 270 customers in 78 countries. We believe GECAS’ broad regional presence and industry expertise as the owner and servicer of one of the world’s largest portfolios of commercial aircraft enhance our ability to manage our portfolio effectively, to acquire and lease additional aircraft and to remarket our aircraft when leases expire.

Our Acquisition Strategy

     We pursue acquisitions of additional aircraft and other aviation assets through our relationships with aircraft operators, manufacturers, financial institutions, private investors and third-party lessors and through our business opportunities agreement with GECAS. We may acquire aircraft for lease directly from manufacturers, in the secondary market or pursuant to sale-leaseback transactions with aircraft operators.

     Our management has extensive experience in the aircraft leasing industry and maintains strong relationships with a wide variety of market participants throughout the world. We seek to build a diversified portfolio of aircraft that can be deployed worldwide across a large operator base. Each potential acquisition will be evaluated to determine if it supports our primary objective of growing our distributable cash flow while maintaining desired portfolio characteristics. We expect that key considerations in our decision to purchase an aircraft will include its price, market value, specification/configuration, condition and maintenance history, operating efficiency, lease terms, financial condition and creditworthiness of the lessee, jurisdiction, industry trends, and the potential for future redeployment and conversion into freighter configuration. We believe that careful analysis of these factors will enable us to maintain a diversified portfolio that maximizes our returns and minimizes our risk profile.

     As part of our growth strategy, we have entered into a business opportunities agreement with GECAS which we expect will lead to opportunities to purchase aircraft from third-party sources that GECAS encounters in its global operations, as well as certain aircraft offered directly by GECAS. For a description of this agreement, see Item 10.C. “Additional Information—Material Contracts—Business Opportunities Agreement.”

Competition

     The leasing and remarketing of commercial jet aircraft is highly competitive. As the exclusive servicer of our aircraft, GECAS competes in leasing, re-leasing and selling our aircraft with other aircraft leasing companies, including ILFC, AerCap, Aircastle, Aviation Capital Group, AWAS, Babcock & Brown Aircraft Management, Babcock & Brown Air Limited, BOC Aviation, Boeing Capital, CIT Aerospace, Macquarie Aircraft Leasing and RBS Aviation Capital, among others. We also may encounter competition from other entities that selectively compete with us, including:

	•		airlines;
	•		aircraft manufacturers;
	•		financial institutions (including those seeking to dispose of repossessed aircraft at distressed prices);
	•		aircraft brokers;
	•		special purpose vehicles formed for the purpose of acquiring, leasing and selling aircraft; and
	•		public and private partnerships, investors and funds, including private equity and hedge funds.

     Competition for a leasing transaction is based principally upon lease rates, delivery dates, lease terms, reputation, management expertise, aircraft condition, specifications and configuration and the availability of the types of aircraft necessary to meet the needs of the customer. We believe we compete favorably in leasing our aircraft due to the reputation and experience of our management, our access to market opportunities through our servicing agreements with GECAS and our ability to structure lease rates and other lease terms to respond to market dynamics and customer needs. However, some of our competitors have significantly greater resources than we have. In addition, some competing aircraft lessors have a lower overall cost of capital and may provide financial services, maintenance services or other inducements to potential lessees that we cannot provide. Given the financial condition of the airline industry, many airlines have reduced their capacity by eliminating certain aircraft from their fleets. This has resulted in an increase in available aircraft of these eliminated types, a decrease in rental rates for these aircraft and a decrease in market values of these aircraft.

     Competition in the purchase and sale of used aircraft is based principally on the availability of used aircraft, price, the terms of the lease to which an aircraft is subject and the creditworthiness of the lessee. When we decide to dispose of an aircraft, GECAS, as our servicer, will arrange the disposition pursuant to the terms of the servicing agreement for that aircraft. In doing so, GECAS will compete with the aircraft leasing companies listed above, as well as with the other types of entities described above and other investors. GECAS is not required to assist us in the purchase of used aircraft, and therefore, in addition to competing with the entities identified above, we may compete with GECAS when seeking to acquire used aircraft.

Insurance

     We require our lessees to carry those types of insurance which are customary in the air transportation industry, including comprehensive liability insurance, aircraft all-risk hull insurance and war-risk insurance covering risks such as hijacking, terrorism (but excluding cover for weapons of mass destruction and nuclear events), confiscation, expropriation, seizure and nationalization. In general, we are named as an additional insured on liability policies carried by our lessees, and we usually are designated as a loss payee in the event of a total loss of the aircraft. The servicer will obtain certificates of insurance from the lessees’ insurance brokers to evidence the existence of such insurance. These certificates of insurance generally contain a breach of warranty endorsement so that, subject to certain standard exceptions, our interests are not prejudiced by any act or omission of the lessee. Coverage under liability policies generally is not subject to deductibles except those as to baggage and cargo that are standard in the airline industry, and coverage under all-risk aircraft hull insurance policies generally is subject to agreed deductible levels in respect of partial damage to the aircraft. In addition, we maintain contingent liability insurance and contingent hull insurance with respect to our aircraft, which is intended to provide coverage in the event that the insurance

maintained by any of our lessees should not be available for our benefit as required pursuant to the terms of the contract.

     Insurance premiums are generally paid by the lessee, with coverage acknowledged by the broker or carrier. The certificates of insurance contain, among other provisions, a “no co-insurance” clause and a provision prohibiting cancellation or material change without a reasonable period of advance written notice to the insurance broker, who is obligated to give us prompt notice. War and allied perils insurance policies customarily provide seven days advance written notice for cancellation and may be subject to lesser notice under certain market conditions. Furthermore, the insurance is primary and not contributory, and insurance carriers generally are required to waive rights of subrogation against us.

     The stipulated loss value schedule under aircraft hull insurance policies is on an agreed value basis. In all cases, the sum of the stipulated loss value and our own additional coverage in place is at least equal to the appraised value of the aircraft. In cases where the servicer believes that the agreed value stated in the lease is not sufficient, the servicer will purchase additional total loss only coverage for the deficiency. Aircraft hull policies contain standard clauses covering aircraft engines. They also contain deductibles and in various cases and under certain circumstances the lessee has the right to self-insure some or all of the risk (which has the effect of significantly increasing the deductible amounts). The lessee is required to pay all deductibles, and would be responsible for payment of amounts self-insured. Furthermore, the aircraft hull policies contain war-risk endorsements and/or supplemental war-risk policies, including, but not limited to, confiscation, seizure, hijacking and similar forms of retention or terrorist acts (where available).

     The comprehensive liability insurance listed on certificates of insurance include provisions for bodily injury, property damage, passenger liability, cargo liability and such other provisions reasonably necessary in commercial passenger and cargo airline operations. As a result of the terrorist attacks on September 11, 2001, the insurance market unilaterally terminated war risk liability coverage for a short period of time. When it became available again, the insurance market imposed a sub limit on each operator’s policy for third-party war risk liability, which is currently between $50 million and $150 million on the customary war-risk liability endorsement available in the London market. U.S., Canadian and certain other non-European Community-based airlines have government war-risk insurance programs available in which they currently participate. Although we currently require each lessee to purchase third party war risk liability in amounts greater than such sublimits, or obtain an indemnity from their government, the market or applicable governments may discontinue to make such excess coverage available for premiums that are acceptable to carriers. As a result, it is possible that we may be required to permit lessees to operate with considerably less third-party war risk liability coverage than currently carried, which could have a material adverse effect on the financial condition of our lessees and on us in the event of an uncovered claim. In late 2005, the international aviation insurance market unilaterally introduced exclusions for physical damage to aircraft hulls caused by dirty bombs, bio-hazardous materials, electromagnetic pulsing and similar causes of loss. It is possible that exclusions for the same types of perils may be introduced into liability policies in the future.

     We cannot assure you that we have adequately insured against all risks, that lessees will at all times comply with their obligations to maintain insurance, that any particular claim will be paid, or that we will be able to procure adequate insurance coverage at commercially reasonable rates in the future. Consistent with industry practice, our insurance policies are subject to commercially reasonable deductibles or self-retention amounts.

Government Regulation

     The air transportation industry is highly regulated. Because we do not operate aircraft, we generally are not directly subject to most of these laws. However, our lessees are subject to extensive regulation under the laws of the jurisdiction in which they are registered or under which they operate. These laws govern, among other things, the registration, operation, maintenance and condition of our aircraft.

     Most of our aircraft are registered in the jurisdictions in which the lessees of our aircraft are certified as air operators. As a result, our aircraft are subject to the airworthiness and other standards imposed by these

jurisdictions. Laws affecting the airworthiness of aircraft generally are designed to ensure that all aircraft and related equipment are continuously maintained in proper condition to enable safe operation of the aircraft. Aircraft manufacturers may also issue their own recommendations in regards to reliability and product improvements.

     Each lessee generally is responsible for complying with all applicable airworthiness directives with respect to its aircraft and is required to maintain the aircraft’s airworthiness. Under certain leases, we have agreed to share with our lessees the cost of implementing certain airworthiness directives (or similar requirements).In addition, if an aircraft is not subject to a lease, we may be forced to bear (or, to induce a prospective lessee to take the aircraft on lease, may have to agree to pay) the cost of compliance with airworthiness directives.

     In addition to these direct cost expenditures, which may be substantial, significant new requirements with respect to noise standards, emission standards and other aspects of our aircraft or their operation could cause the value of our aircraft portfolio to decrease unless embodied. Other regulations may be imposed, from time to time, not only by the jurisdictions in which the aircraft are registered, possibly as part of the airworthiness requirements, but also in other jurisdictions where the aircraft operate. In addition, aviation regulations require aircraft to be maintained under an approved maintenance program having defined procedures and intervals for inspection, maintenance and repair. To the extent that our aircraft are off lease or a lessee defaults in effecting such compliance, we may be required to comply with such requirements at our expense.

C. Organizational Structure

We own our aircraft through five subsidiaries: Genesis Funding, Genesis Acquisition, Genesis Portfolio, Genesis Lease Atlantic Alpha and Westpark 1 Aircraft Leasing. A charitable trust holds interests in Genesis Funding and Genesis Acquisition, with limited voting rights and less than 0.001% of the economic interest in these subsidiaries. Each of these subsidiaries is organized under the laws of Bermuda and is tax resident in Ireland.

As at December 31, 2008, 41 of our aircraft were held in Genesis Funding, 11 in Genesis Portfolio, one in Genesis Lease Atlantic Alpha Limited and one in Westpark 1 Aircraft Leasing Limited.

D. Property, Plants and Equipment

Our Aircraft Portfolio

     Our portfolio consists of 54 aircraft. As at December 31, 2008, 50 of those aircraft are in operation with 34 airlines located in 19 countries. The remaining four aircraft are non-revenue-generating but are subject to contracted lease agreements with two new customers for delivery in the second quarter of 2009. However, one of the customers may not be in a position to take delivery of two of these aircraft. Forty-five of the fifty leases in operation in our portfolio are subject to fixed rental rates. The weighted average remaining lease term of our total portfolio of aircraft is 4.5 years. Our portfolio includes 46 narrow-body aircraft (Boeing 737-400, 500, 700 and 800, Airbus A319-100 and A320-200), four cargo aircraft (Boeing 747-400SF and 767-200PC), two regional jets (ERJ170-100) and two wide-body passenger aircraft (Airbus A330-200 and Boeing 767-300ER). These aircraft are typically compliant with noise (Stage 3) and other environmental standards, relatively fuel efficient and technologically advanced.

In this annual report, all percentages and weighted averages of the aircraft in our portfolio have been calculated using the average of half life appraised values as at December 31, 2008. The average value of those appraised base values of the aircraft in our portfolio (assuming that each aircraft is in half-life condition) is $1.62 billion. The following table presents the aircraft in our portfolio:

Our Portfolio

Equipment

Airframe

Lessee

Type

Type

Engine Type(1)

Build Date

Percent

ABX Air

767-200PC

Cargo(2)

CF6-80A

November 1984

0.20

%

ABX Air

767-200PC

Cargo(3)

CF6-80A

February 1985

0.20

%

Air Baltic

737-500

Narrow-body

CFM56-3C1

October 1991

0.50

%

Air Berlin

737-700

Narrow-body

CFM56-7B26

November 2001

1.70

%

Air Berlin

737-700

Narrow-body

CFM56-7B26

October 2001

1.70

%

Air Canada

A319-100

Narrow-body

CFM56-5B6/P

March 2003

1.60

%

Air China Cargo

747-400SF

Cargo(4)

PW 4056-3

January 1991

3.50

%

Air China Cargo

747-400SF

Cargo(5)

PW 4056-3

August 1991

3.50

%

Air Europa

737-800

Narrow-body

CFM56 7B26

November 2005

2.30

%

American

737-800

Narrow-body

CFM56-7B27

September 2001

1.90

%

American

737-800

Narrow-body

CFM56-7B27

September 2001

1.90

%

China Southern

737-800

Narrow-body

CFM56-7B26

November 2005

2.30

%

China Southern

737-800

Narrow-body

CFM56-7B26

September 2005

2.30

%

El Al

737-800

Narrow-body

CFM56-7B26

February 1999

1.60

%

EVA Airways

A330-200

Wide-body

CF6-80E1A3

February 2005

4.50

%

Garuda

737-400

Narrow-body

CFM56-3C1

July 1998

0.90

%

Germanwings

A319-100

Narrow-body

CFM56-5B6/P

November 1999

1.30

%

Germanwings

A319-100

Narrow-body

CFM56-5B6/P

December 1999

1.30

%

GOL

737-800

Narrow-body

CFM56-7B27

August 2006

2.40

%

GOL

737-800

Narrow-body

CFM56-7B27

August 2006

2.50

%

Iberworld

A320-200

Narrow-body

CFM56-5B4/P

March 2002

1.70

%

IndiGo

A320-200

Narrow-body

V2527-A5

July 2007

2.50

%

IndiGo

A320-200

Narrow-body

V2527-A5

September 2007

2.50

%

JAL

B767-300ER

Widebody

CF6-80C2B7F

January 2008

4.70

%

KTHY

737-800

Narrow-body

CFM56-7B26

May 2001

1.70

%

Equipment

Airframe

Lessee

Type

Type

Engine Type(1)

Build Date

Percent

Lion Air

737-400

Narrow-body

CFM56-3C1

January 1991

0.60

%

LOT

ERJ170-100

Regional Jet

CF34-8E5

April 2004

1.10

%

LOT

ERJ170-100

Regional Jet

CF34-8E5

February 2004

1.10

%

LTU

A320-200

Narrow-body

CFM56-5B4/P

February 2001

1.60

%

LTU

A320-200

Narrow-body

CFM56-5B4/P

May 2001

1.60

%

MyTravel

A320-200

Narrow-body

CFM56-5B4/P

January 2003

1.90

%

MyTravel

A320-200

Narrow-body

CFM56-5B4/P

February 2003

1.90

%

MyTravel

A320-200

Narrow-body

CFM56-5B4/P

February 2003

1.90

%

Norwegian Air

737-800

Narrow-body

CFM56-7B26

April 2001

1.80

%

PAL

A320-200

Narrow-body

CFM56-5B4/P

December 1998

1.40

%

Sichuan Airlines

A320-200

Narrow-body

V2527E-A5

May 2001

1.70

%

Skymark

737-800

Narrow-body

CFM56-7B26

December 2005

2.30

%

Sun Express

737-800

Narrow-body

CFM56-7B26

March 2001

1.80

%

TAM

A320-200

Narrow-body

V2527-A5

September 2001

1.70

%

Travel Service

737-800

Narrow-body

CFM56-7B26

April 2000

1.80

%

Travel Service

737-800

Narrow-body

CFM56-7B26

June 2001

1.80

%

Unidentified(6)

A320-200

Narrow-body

V2527-A5

July 2007

2.50

%

Unidentified(6)

A320-200

Narrow-body

V2527-A5

September 2007

2.50

%

Unidentified(6)

737-800

Narrow-body

CFM56-7B26

May 2000

1.70

%

Unidentified(6)

737-800

Narrow-body

CFM56-7B27

June 2000

1.70

%

United

A320-200

Narrow-body

V2527-A5

October 2001

1.70

%

United

A320-200

Narrow-body

V2527-A5

September 2001

1.70

%

United

A320-200

Narrow-body

V2527-A5

September 2001

1.70

%

USA 3000

A320-200

Narrow-body

CFM56-5B4/P

August 2002

1.80

%

UEAir

A319-100

Narrow-body

CFM56-5B6/P

January 1999

1.30

%

UEAir

A319-100

Narrow-body

CFM56-5B6/P

January 1999

1.30

%

VRG

737-700

Narrow-body

CFM56-7B26

November 1999

1.40

%

VRG

737-700

Narrow-body

CFM56-7B26

September 1999

1.40

%

Vueling

A320-200

Narrow-body

CFM56-5B4/P

February 2005

2.10

%

CFM		CFM International

CF34/CF6		General Electric
V		International Aero Engines
PW		Pratt & Whitney

Our portfolio consists of fuel efficient commercial jet aircraft that were manufactured between 1984 and 2008. As at December 31, 2008, the weighted average age of these aircraft was 6.6 years (5.7 years excluding cargo aircraft). The following table presents the composition of our portfolio based on age, as at December 31, 2008:

						Percent of
						Total
						Appraised
Aircraft Age		Number				Value
Passenger
0 to 5 years			15				37.7	%
5 to 10 years			31				51.5	%
10 to 15 years			2				2.3	%
15+ years			2				1.0	%
Cargo(1)			4				7.5	%
Total			54				100	%

The following table presents the years in which the aircraft in our portfolio were manufactured:

Our portfolio contains eleven different types of airframes, including a variety of narrow-body, wide-body, and cargo airframe configurations. Boeing aircraft account for 52.3% of the portfolio, Airbus aircraft account for 45.5% of the portfolio and Embraer regional jets account for the remaining 2.2% of the portfolio.

Of the eleven different aircraft types contained in our portfolio, six are passenger narrow-body, two are passenger wide-body, one is regional passenger jet, and two are cargo wide-body. Although the Boeing 767-200PC is classified as a cargo wide-body frame, aircraft of this type do not have main deck cargo doors installed because they were converted for use by the current lessee as package carriers. The initial leases of these aircraft provide that if the lessee installs main deck cargo doors on these aircraft, the lessor will contribute an amount equivalent to $1.8 million (as at December 31, 2008) per aircraft, which reflects a portion of the rent designated and deferred for this purpose. Although the lessee may not install such doors, GE has transferred to us the amounts of rent so designated as at the closing of our IPO, and we are obligated to make the applicable required payments to the lessee if it installs such a cargo door on either of these aircraft. Approximately 81.1% of the aircraft in our portfolio are members of the narrow-body Airbus A319, Airbus A320 and Boeing 737 families, all of which enjoy high worldwide demand due to their fuel-efficient design, relatively low maintenance costs, and an increase in customer demand for point-to-point destination service. These aircraft are used on more routes around the world than any other airframe and thus have the largest installed base. As a result, we believe they are easier to lease and market than wide-body jets or other specialized types of aircraft. The table below presents the composition of our portfolio based on airframe type:

						Percent of
						Total
						Appraised
Airframe Type		Number				Value
Passenger narrow-body
A320-200			18				34.2	%
737-800			16				31.9	%
A319-100			5				6.8	%
737-700			4				6.3	%
737-400			2				1.4	%
737-500			1				0.5	%
Total narrow-body			46				81.1	%
Passenger wide-body
767-300ER			1				4.7	%
A330-200			1				4.5	%
Total wide-body			2				9.2	%
Regional passenger
ERJ-170-100			2				2.2	%
Total regional jet			2				2.2	%
Cargo wide-body
747-400SF			2				7.0	%
767-200PC(1)			2				0.5	%
Total cargo			4				7.5	%
Total			54				100	%

The lessees of the aircraft in our portfolio are dispersed across 19 countries. Approximately 32.7% of our portfolio is leased to European carriers, 35.1% to Asian carriers, and 12.7% to North American carriers. Aircraft based in China and the United States comprise 15.8% and 11.0% of our portfolio, respectively. The table below presents the composition of our portfolio based on the geographic location of our lessees:

						Percent of
						Total
						Appraised
Geographic Profile		Number				Value
Europe			20				32.7	%
Asia/Pacific			15				35.1	%
United States and Canada			9				12.7	%
Central and South America and Mexico			5				9.6	%
Africa/Middle East			1				1.6	%
Undesignated (1)			4				8.3	%
Total			54				100.0	%

Our Leases

Lease Terms

As at December 31, 2008, the weighted average remaining lease term of our portfolio was 4.5 years. Our lease maturities range from 2009 to 2020. The following table presents the scheduled lease maturities of the aircraft in our portfolio:

     Under our leases, the lessees agree to lease the aircraft for a fixed term, although in some cases the lessees have purchase options, termination rights or extension rights. Most lease rentals are payable monthly in advance, but some lease rentals are payable quarterly, in arrears or on an individually negotiated schedule. Of our leases, forty-five have fixed rental rates and

five have floating rental rates based on six-month LIBOR. Twenty-nine of our leases also currently require the lessees to pay additional rent amounts, monthly or annually in arrears, based on usage. All leases are on a “net” basis with the lessee generally responsible for all operating expenses, which customarily include maintenance, fuel, crews, airport and navigation charges, taxes, licenses, aircraft registration and insurance premiums.

Most of our leases generally provide that the lessee’s payment obligations are absolute and unconditional under any and all circumstances. Lessees are generally required to make payment without deduction on account of any amounts that we may owe the lessee or any claims that the lessee may have against us. Most of our leases also require lessees to gross up lease payments where they are subject to withholdings and other taxes, including withholdings that arise out of transfers of the aircraft to or by us or due to our corporate structure. In addition, changes in law may result in the imposition of withholding and other taxes and charges that are not reimbursable by the lessee under the lease or that cannot be reimbursed under applicable law. Furthermore, lessees may fail to reimburse us even when obligated under the lease to do so. Our leases generally require lessees to indemnify us for certain other tax liabilities relating to the leases and the aircraft, including, in most cases, value added tax and stamp duties.

The cost of an aircraft typically is not fully recovered over the term of the initial lease. We therefore retain the benefit and assume the risk of the rent at which we can re-lease the aircraft upon expiration or early termination of the lease and of the ultimate residual value. Operating leases allow airlines greater fleet and financial flexibility than outright ownership because of the relatively shorter-term nature of operating leases, the relatively small initial capital outlay necessary to obtain use of the aircraft and the significant reduction in aircraft residual value risk.

Purchase Options. Six of the leases in our portfolio provide the lessee with an option to purchase the aircraft during or at the end of the lease term. Purchase options vary with the individual leases and include fixed price options to purchase the aircraft at a set period prior to the expiration of the lease and/or a continuous option to purchase the aircraft upon the occurrence of certain tax indemnity events.

Extension Options. Eleven of our leases give the lessee an option to extend the term of the lease. In addition, one of the leases provides us with an extension option, but the lessee is entitled to buy out our extension option.

Early Termination Rights. Ten of our leases provide the lessees with early termination rights. Early termination rights generally require the lessee to provide sufficient notice of termination to enable us to remarket or otherwise dispose of the aircraft before lease expiration. Early termination may trigger substantial financial penalties payable by the lessee which we believe will reduce the potential that the lessees will terminate early. Certain leases with shorter notice periods permit early termination for obsolescence on 90 days’ notice, but unless we elect otherwise, the affected aircraft will be sold and the lessee is obligated to pay an amount by which the net sales proceeds are less than the then-applicable agreed value.

Certain leases do not have a specified notice period but can be terminated early only upon the lessee’s inability to obtain and maintain necessary governmental approvals and only upon payment of termination compensation equal to the lesser of two years’ rent or the rent remaining payable under the lease.

Operating Costs and Expenses. The lessee is liable through various operational indemnities for operating costs and expenses accrued or payable during the term of the relevant lease, which would normally include costs and expenses associated with the maintenance and operation of the aircraft, airport and navigation charges, certain taxes, licenses, consents and approvals, aircraft registration and hull all risk and public liability insurance programs.

Security Deposits and Letters of Credit. Forty five of our leases provide for cash security deposits and/or letters of credit which may be drawn down in the event that a lessee defaults under any of these leases. These security deposits and/or letters of credit may mitigate losses we may incur while attempting to re-lease the aircraft. Under certain circumstances, the lessee may be required to obtain guarantees or other financial support from an acceptable financial institution or other third parties.

Maintenance Obligations. Under our leases, the lessee is generally responsible for normal maintenance and repairs, airframe and engine overhauls, obtaining consents and approvals and compliance with return conditions of aircraft on lease. In connection with the lease of a used aircraft we sometimes agree to contribute specific additional amounts to the cost of certain major overhauls or modifications, which usually reflect the usage of the aircraft prior to the commencement of the lease. In many cases, we also agree to share with our lessees the cost of compliance with airworthiness directives.

Our portfolio includes twenty-nine leases pursuant to which we collect additional rent that is determined based on usage of the aircraft measured by hours flown or cycles operated and we are obligated to make contributions to the lessee for expenses incurred for certain planned major maintenance, up to a maximum amount that is typically determined based on additional rent paid by the lessee. Such major planned maintenance includes heavy airframe, off-wing engine, landing gear and auxiliary power unit overhauls. We are not obligated to make maintenance contributions under such leases at any time that a lessee default is continuing. We are not obligated to make any maintenance contributions under the remaining twenty-one leases in our portfolio. However, most of these twenty-one leases provide for a lease-end adjustment payment by the lessee or us at the end of the lease based on the usage of the aircraft during the lease and its condition upon return.

Compliance with Laws. The lessee is responsible for compliance with all applicable laws and regulations with respect to the aircraft. We generally require our lessees to comply with the standards of either the U.S. Federal Aviation Administration or its non-U.S. equivalent. We often require a deposit as security for the lessee’s performance of obligations under the lease and the condition of the aircraft upon return. In addition, the leases contain extensive provisions regarding our remedies and rights in the event of a default by the lessee and specific provisions regarding the return condition of the aircraft. Except at the commencement of the term of a lease of a used aircraft, the lessee generally is required to continue to make lease payments during any period in which the aircraft is not in operation due to maintenance or grounding.

General. Each aircraft generally must remain in the possession of the applicable lessee and any sublessees of the aircraft generally must be approved by the lessor unless, in some leases, certain conditions are met. Under most of our leases, the lessees may enter into charter or “wet lease” arrangements in respect of the aircraft (i.e., a lease with crew and services provided by the lessor under the lease), provided the lessee does not part with operational control of the aircraft. One of the aircraft is currently subject to a wet lease. Under some of our leases, the lessee is permitted to enter into subleases with specified operators or types of operators

without the lessor’s consent, provided certain conditions are met. We are aware that seven of the aircraft are currently subject to subleases. Our leases also generally permit the lessees to subject the equipment or components to removal or replacement and, in certain cases, to pooling arrangements (temporary borrowing of equipment), without the lessor’s consent but subject to conditions and criteria set forth in the applicable lease. Under our leases, the lessee may deliver possession of the aircraft, engines and other equipment or components to the relevant manufacturer for testing or similar purposes, or to a third party for service, maintenance, repair or other work required or permitted under the lease.

Some foreign countries have currency and exchange laws regulating the international transfer of currencies. When necessary, we will require as a condition to any foreign transaction, that the lessee or purchaser in a foreign country obtain the necessary approvals of the appropriate government agency, finance ministry or central bank for the remittance of all funds contractually owed in U.S. dollars. We attempt to minimize our currency and exchange risks by negotiating most of our aircraft leases in U.S. dollars. The terms of the securitization permit Genesis Funding to have up to 5% of its leases denominated in Euros. All of our leases are currently payable in U.S. dollars.

Lease Restructurings. During the term of a lease, a lessee’s business circumstances may change to the point where it is economically sensible for us to consider restructuring the terms of the lease. Restructurings may involve the voluntary termination of leases prior to contracted lease expiration, the arrangement of subleases from the primary lessee to another airline, the rescheduling of lease payments, the forgiveness and/or reduction of lease obligations and the extension of the lease terms.

     Aircraft Repossessions. If a restructuring is not possible, we may seek to terminate the lease and gain possession of the aircraft for remarketing. Although the majority of repossessions are accomplished through negotiation, if we cannot obtain the lessee’s cooperation we would have to take legal action in the appropriate jurisdiction. This legal process could delay the ultimate return of the aircraft. In addition, in connection with the repossession of an aircraft, we may be required to pay outstanding mechanics, airport, navigation and other liens on the repossessed aircraft. These charges could relate to other aircraft that we do not own but were operated by the lessee. In contested repossessions, we likely would incur substantial additional costs for maintenance, refurbishment and remarketing of the aircraft. We repossessed six aircraft in 2008. Of those aircraft, two were B737-700 aircraft which were redeployed during the year with a new customer. The remaining four aircraft (two A320-200 and two B737-800 aircraft) are subject to contracted lease agreements with two new customers for delivery in the second quarter of 2009. However, one of the customers may not be in a position to take delivery of two of these aircraft.

Lease Management and Remarketing

We outsource our lease management and aircraft remarketing activities to GE Commercial Aviation Services (GECAS), enabling our senior management to focus primarily on sourcing and executing aircraft acquisitions. Pursuant to our servicing agreements with GECAS, GECAS provides us with most services related to leasing our fleet, including marketing aircraft for lease and re-lease or sale, collecting rents and other payments from the lessees of our aircraft, monitoring maintenance, insurance and other obligations under our leases and

enforcing our rights against lessees. See Item 10.C. “Additional Information — Material Contracts — Servicing Agreements.”

GECAS, the U.S. and Irish commercial aircraft financing and leasing businesses of GE Capital, is a leading global player in commercial aircraft leasing and financing, with over 1,800 owned and managed aircraft, 28 offices, and over 270 customers in 78 countries. GECAS’ long-term commitment to the aviation industry extends to the development of necessary infrastructure to foster and ensure continued growth and extends further to jet engine financing and aircraft parts solutions We believe GECAS’ broad regional presence and industry expertise as the owner and servicer of one of the world’s largest portfolios of commercial aircraft enhance our ability to manage our portfolio effectively, to acquire and lease additional aircraft and to remarket our aircraft when leases expire.

From time to time, we may decide to dispose of our leased aircraft at or before the expiration of their leases. As with acquisitions, our primary objective of growing our distributable cash flow while maintaining desired portfolio characteristics will guide our analysis of aircraft disposition opportunities. Although our management will decide whether or not to make any such dispositions, dispositions will be executed on our behalf by GECAS pursuant to our servicing agreements.

Properties

We lease office space in Shannon, Co. Clare, Ireland. We do not, and do not expect to, incur significant lease expense.

Item 4A. Unresolved Staff Comments

Not applicable.

Item 5. Operating and Financial Review and Prospects

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our combined and consolidated financial statements and related notes included elsewhere in this Annual Report. The combined and consolidated financial statements for each of the three years ended December 31, 2008 have been prepared in accordance with U.S. GAAP, and are presented in U.S. dollars. The discussion below contains forward-looking statements that are based upon our current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from these expectations due to changes in global, regional or local political, economic, business, competitive, market, regulatory and other factors, many of which are beyond our control. See “Preliminary Note” and Item 3.D.“Risk Factors.”

A. Results of Operations

History

     We are Genesis Lease Limited, a Bermuda exempted company incorporated on July 17, 2006 under the provisions of Section 14 of the Companies Act 1981 of Bermuda. Our registered office is located at

Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda. Although we are organized under the laws of Bermuda, we are resident in Ireland for Irish tax purposes and thus are subject to Irish corporation tax on our income in the same way, and to the same extent, as if we were organized under the laws of Ireland. Our principal executive offices are located at 4450 Atlantic Avenue, Westpark, Shannon, Co Clare, Ireland. Our telephone number at that address is +353 61 233 300.

Our aircraft are leased under long-term contracts to a diverse group of airlines throughout the world. We leverage the worldwide platform of GECAS to service our portfolio of leases, allowing our management to focus on executing our growth strategy. Our strategy is to grow our portfolio through acquisitions of aircraft from third parties, such as airlines and financial investors.

We acquired our Initial Portfolio of 41 aircraft pursuant to the asset purchase agreement, dated as of December 19, 2006 (the “Closing Date”), between Genesis Funding, GE Capital and certain affiliates of GE that owned the aircraft (or the equity interests therein) on the Closing Date. We paid $1,459.4 million as consideration for the 41 aircraft on the Closing Date.

     Since our IPO, we have increased our portfolio by 13 aircraft from 41 to 54 aircraft. Twelve aircraft were purchased during the year ended December 31, 2007, eight from GECAS affiliates and four from two airlines on a sale and leaseback basis. One further aircraft was purchased from a GE affiliate during the year ended December 31, 2008. As at December 31, 2008, the weighted average age of the aircraft in our portfolio was 6.6 years, and the weighted average remaining lease term of our portfolio was 4.5 years. Fifty of the fifty four aircraft are subject to net operating leases under which the lessee is responsible for most operational, maintenance and insurance costs. The terms of our leases provide us with a stable source of revenues and cash flows.

The table below presents the number of aircraft included in Genesis’s financial statements as at December 31, 2006, 2007 and 2008 and the number of aircraft included in the Predecessor’s financial statements as at December 31, 2004 and 2005.

December 31,		Number of Aircraft
2004			31
2005			37
2006			41
2007			53
2008			54

The combined and consolidated financial statements have been prepared to reflect the combination of the aircraft and their financial position, results of operations and cash flows pursuant to the terms of the asset purchase agreement, entered into between Genesis Funding, GE Capital and certain affiliates of GE that owned the aircraft (or the equity interests therein) at the Closing Date.

The acquisition of our Initial Portfolio was accounted for as a transaction between entities under common control. The transfer of the aircraft from affiliates of GE to us in substance constituted an issuance of subsidiary stock, and as such, the transfer was accounted for at historical cost similar to a transaction between entities under common control. Results for each aircraft in the Initial Portfolio have been included in the combined and consolidated financial statements from the dates that such aircraft came under GE’s ownership and control. “Push down” accounting was not required because no single investor or collaborative group of investors held more than 95% of our outstanding shares upon completion of our IPO. The

excess of the amount paid to GE to transfer the Initial Portfolio of 41 aircraft over the net book value has been treated as a reduction in equity (i.e. a special distribution).

     Our historical combined financial statements for periods prior to the completion of our IPO on December 19, 2006, reflect the combination of the aircraft included in our Initial Portfolio and the related leases as owned and operated by affiliates of GE until December 18, 2006. The historical combined financial statements have been prepared on a “carve out” basis derived from GE’s consolidated financial statements. All intercompany transactions have been eliminated in the combined financial statements included herein. Because a direct ownership relationship did not exist among the various GE aircraft-owning entities prior to our IPO, GE’s interest in the predecessor, including intercompany debt, was shown in the combined balance sheet and the statement of shareholders’ equity in the combined financial statements. The historical combined financial statements do not reflect the financial condition, results of operations or cash flows that we would have achieved during the periods presented. GE has not indemnified us for any material misstatements or omissions in the combined financial statements included within this Annual Report.

Prior to our IPO, certain services had been provided or procured by GE with respect to the aircraft in the Initial Portfolio. These services include the following:

	•		marketing, technical and operating management services relating to the aircraft;
	•		risk management approvals and services relating to the aircraft;
	•		insurance for general corporate, property, casualty and hull coverage;
	•		information technology services;
	•		human resources, including employee benefit processing and payroll administration;
	•		financial advisory services such as tax consulting, capital markets services and financial and accounting support services;
	•		legal services;
	•		occupancy costs such as rent and utilities; and
	•		other corporate services.

The combined financial statements for all periods prior to the completion of our IPO include allocations of costs for these services based on the cost to GE of providing or procuring such services. The method used to allocate these costs to our aircraft was a multi-step process, whereby the costs were first allocated to GECAS as one of GE’s divisions based on the relative book values of net assets, and then further allocated to our predecessor based on the total number of aircraft owned by our predecessor at a particular time. Costs included in the financial statements for such services provided to our predecessor are included in “Selling, general and administrative expenses.”

In addition, although GE did not allocate any indebtedness to the predecessor’s aircraft or to the predecessor, GE did allocate interest cost to each of its divisions, including GECAS. GE made the interest allocations based upon its net investment in a particular business, the debt-to-equity ratio for that business and the business’s borrowing costs. The combined financial statements include an allocation of interest expense using the same methodology as described above. Costs included in the financial statements for such interest charges are included in interest expense.

     Our consolidated financial statements for periods since the completion of our IPO on December 19, 2006 include all of our majority-owned subsidiaries, assets and liabilities.

Critical Accounting Policies and Estimates

Our consolidated and combined financial statements have been prepared in accordance with U.S. GAAP, which requires the application of accounting policies based on assumptions, estimates, judgments and opinions. Our predecessor applied, and we have applied and will continue to apply, these policies based on the best information available at the time and on assumptions believed to be reasonable under the circumstances.

The following is a discussion of the critical accounting policies and the methods of their application. For a further description of our significant accounting policies, please read note 3 to our combined and consolidated financial statements included at Item 18 of this Annual Report.

Revenue — Rental of Flight Equipment

     Genesis leases flight equipment (also referred to as “aircraft”) under operating leases and records rental income on a straight-line basis over the term of the lease. Rentals received but unearned under the lease agreements are recorded in “Rentals received in advance” on the Balance Sheet and included in other liabilities until earned. In certain cases, leases provide for additional rentals based on usage, which is recorded as revenue as it is earned under the terms of the lease. The usage is calculated based on hourly usage or cycles operated, depending on the lease agreement. Usage is typically reported monthly by the lessee and is non-refundable. Other leases provide for a lease-end adjustment payment by Genesis or the lessee at the end of the lease based on usage of the aircraft and its condition upon return. Lease-end adjustment payments received are included in rental of flight equipment. Lease-end adjustment payments made are capitalized in “Flight equipment under operating leases, net” when they relate to planned major maintenance activities or expensed when they relate to light maintenance activities.

     Past-due rentals are recognized on the basis of management’s assessment of collectibility. No revenues are recognized, and no receivable is recorded, from a lessee when collectibility is not reasonably assured. Estimating whether collectibility is reasonably assured requires some level of subjectivity and judgment. When collectibility of rental payments is not certain, revenue is recognized when cash payments are received. Collectibility is evaluated based on factors such as the lessee’s credit rating, payment performance, financial condition and requests for modifications of lease terms and conditions as well as security received from the lessee in the form of guarantees and/or letters of credit.

Flight Equipment under Operating Leases

     Flight equipment under operating leases is recorded at cost less accumulated depreciation and amortization. Costs related to lessee specific modifications are capitalized as part of “Flight equipment under operating leases, net” and amortized over either the term of the lease or the depreciable life of the aircraft depending upon the nature of the improvement. Pre-delivery payments made in advance of purchase of flight equipment are included in “Other assets” and are reclassified to “Flight equipment under operating leases, net” when the asset is delivered. Interest related to pre-delivery deposits on aircraft purchase contracts is capitalized as part of the aircraft cost.

     For planned major maintenance activities, Genesis capitalizes the actual maintenance costs by applying the deferral method in accordance with the Financial Accounting Standards Board (“FASB”) Staff Position (FSP) No. AUG AIR-1, Accounting for Planned Major Maintenance Activities. Genesis capitalizes the actual cost of major overhauls, which are depreciated on a straight-line basis over the period until the next overhaul is required.

     Depreciation is computed on a straight-line basis to the aircraft’s estimated residual value over a period of up to 20 years from the date of acquisition of the aircraft. Residual values are determined based on estimated market values at the end of the depreciation period received from independent appraisers.

     In accounting for flight equipment under operating lease, management makes estimates on the estimated residual values. Estimated residual values are determined based on independent appraisals of the aircraft’s estimated market value at the end of the depreciation period. Exceptions may be made to this policy on a case-by-case basis when, in management’s judgment, based on various factors, the residual value calculated pursuant to this policy does not appear to reflect current expectations of the residual value of a particular aircraft. Such factors include, but are not limited to, the extent of cash flows generated from future lease arrangements as a result of changes in global and regional economic and political conditions resulting in lower demand for our aircraft, the effect of government regulations including noise or emission standards, which may make certain aircraft less desirable in the marketplace, incidents of lease restructuring, which result in lower lease rates for troubled lessees, and other factors, many of which are outside of management’s control.

     Flight equipment under operating leases is tested for recoverability whenever events or changes in circumstances indicate that the related carrying amount may not be recoverable in accordance with Statement of Financial Accounting Standards (“SFAS”) 144, Accounting for the Impairment or Disposal of Long-lived Assets. An impairment loss is recognized when the carrying amount of the long-lived asset is not recoverable and exceeds its fair value. The carrying amount of a long-lived asset is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. Any required impairment loss is measured as the amount by which the carrying amount of a long-lived asset exceeds its fair value and is recorded as a reduction in the carrying value of the related asset and a charge to operating results. Once an impairment results in a reduction in the carrying value of an asset, the carrying value of such asset cannot thereafter be increased. Fair value is determined based on current market values received from independent appraisers.

Flight equipment under operating lease includes two aircraft on lease to airlines in Japan in which Genesis and its subsidiaries, in accordance with local laws, hold beneficial interest but not legal title. Under Japanese law, legal title to each aircraft registered in Japan must be held by a Japanese entity. In order to facilitate the lease to the airlines and to meet Japanese registration requirements, Genesis and its predecessor (the “Acquirers”), with the cooperation of the airlines and in accordance with the terms of sales agreements, sold title to these aircraft to two Japanese entities that are owned and managed by a Japanese corporation. However, beneficial ownership of the aircraft is effectively held by wholly owned subsidiaries of Genesis. Concurrently with such sale, the Acquirers and the Japanese entities entered into a conditional sale agreement whereby the Acquirers repurchased the aircraft from the entities. The Acquirers have paid the entire repurchase price under the conditional sale agreements except one remaining installment in the amount of one U.S. dollar. Under the conditional sales agreements, Genesis effectively holds the beneficial ownership interest of the aircraft, including all of the risks and rewards of ownership.

     Because Genesis has not relinquished control over the aircraft upon transfer of the aircraft’s title to the Japanese entities, as evidenced by the one dollar purchase option in the conditional sale agreements which is exercisable at any time, and has retained all of the risks and rewards of ownership of the aircraft, Genesis has not recognized either of these transactions as a sale for accounting purposes and continue to recognize the aircraft as “Flight equipment under operating lease” in the financial statements.

Business Combinations and Goodwill

     The acquisition of an aircraft under a business combination is accounted for using the purchase method in accordance with SFAS 141, Business Combinations. Genesis applies the purchase price of aircraft acquired to the fair value of assets acquired and liabilities assumed by major balance sheet caption, including identifiable intangible assets and liabilities, as at the acquisition date. Goodwill represents the excess of the aggregate purchase price over the fair value of the net assets acquired in a purchase businesses combination. Goodwill is reviewed for impairment at least annually in accordance with the provisions of

SFAS No. 142, Goodwill and Other Intangible Assets. The goodwill impairment test is a two-step test. Under the first step, the fair value of the reporting unit is compared with its carrying value (including goodwill). If the fair value of the reporting unit is less than its carrying value, an indication of goodwill impairment exists for the reporting unit and the enterprise must perform step two of the impairment test (measurement). Under step two, an impairment loss is recognized for any excess of the carrying amount of the reporting unit’s goodwill over the implied fair value of that goodwill. The implied fair value of goodwill is determined by allocating the fair value of the reporting unit in a manner similar to a purchase price allocation, in accordance with SFAS 141, Business Combinations. The residual fair value after this allocation is the implied fair value of the reporting unit goodwill. Fair value of the reporting unit is determined using a discounted cash flow analysis. If the fair value of the reporting unit exceeds its carrying value, step two does not need to be performed.

     During the years ended December 31, 2007 and 2008, Genesis did not record any goodwill on acquisition of flight equipment accounted for as business combinations, as the purchase price paid reflected the fair value of the tangible and intangible assets acquired and liabilities assumed.

     In accounting for flight equipment acquired under a business combination, management makes estimates of the fair value of the attached leases separate from the fair value of the underlying aircraft. Determining the fair value of attached leases requires us to make assumptions regarding the current fair value of leases attaching to specific aircraft. Management estimates a range of fair values of similar aircraft in order to determine if the attached lease is within a fair value range. If a lease is above market terms, the present value of the estimated amount above the fair value range is calculated over the remaining contractual lease term of the lease. Any resulting lease premium assets are amortized on a straight line basis as a reduction of rental income over the remaining useful life of the lease. If a lease is below market terms, the present value of the estimated amount below the fair value range is calculated over the remaining contractual lease term of the lease. Related assets and liabilities representing such values are reported in Other assets and Other liabilities, respectively. Any resulting lease discounts are amortized as an addition to rental income over the remaining useful life of the lease. Genesis considers lease renewals on a lease by lease basis.

Maintenance Expense

     Genesis records a charge for light maintenance expense when incurred in “Maintenance expense” on the Statement of Income. These light maintenance costs relate primarily to those incurred in the re-leasing of aircraft and during the transition between leases. For planned major maintenance activities, Genesis capitalizes and depreciates the actual costs by applying the deferral method. These amounts capitalized are included in “Flight Equipment under operating leases, net” and are depreciated over the period until the next overhaul is required. During the year ended December 31, 2008, and as part of on-going periodic reviews, Genesis revised its estimate of the intervals to the next overhaul.

Income taxes

     Genesis applies SFAS 109, Accounting for Income Taxes, which requires the asset and liability method of accounting for income taxes. Deferred income tax assets and liabilities are recognized for the future tax consequences attributed to differences between the financial statements and tax basis of existing assets and liabilities using enacted rates applicable to the periods in which the differences are expected to affect taxable income. Deferred income tax assets represent amounts available to reduce income taxes payable on taxable income in future years. The recoverability of these future tax deductions is evaluated by assessing the adequacy of future taxable income from all sources, including the reversal of temporary differences and forecasted operating earnings. No valuation allowance has been provided as it is more likely than not that the deferred tax assets will be realized. Income taxes have been provided for all items included in the Statements of Income regardless of when such items were reported for tax purposes or when the taxes were actually paid or refunded.

     Beginning with the adoption of FIN 48, “Accounting for Uncertainty in Income Taxes — an interpretation of FASB Statement No. 109” (FIN 48), as at January 1 2007, Genesis recognizes the effect of income tax positions only if those positions are more likely than not of being “sustained”. FIN 48 requires that the company measure the benefit using a “cumulative probability” analysis, and requires the measurement to be based on management’s best judgment about the amount the taxpayer would accept to settle the issue. Recognized income tax positions are measured at the largest amount of benefit that has a greater than 50% likelihood of being realized upon settlement. Changes in recognition or measurement are reflected in a period in which the change occurs. Prior to the adoption of FIN 48, Genesis recognized the effect of income tax positions only if such positions were probable of being sustained.

     Genesis’s accounting policy for recording interest and penalties associated with the liability for unrecognized tax benefits is to record such items as a component of other expenses.

Share-based based compensation

     Compensation costs relating to share-based payments are recognized based on the fair value of the equity instruments issued in accordance with SFAS 123(R), Share-Based Payment. Fair value of the equity instruments are determined based on a valuation using an option pricing model which takes into account various assumptions that are subjective. Key assumptions used in developing the valuation include the expected term of the equity award taking into account both the contractual term of the award, the effects of employees’ expected exercise and post-vesting termination behavior, expected volatility, expected dividends and the risk-free interest rate for the expected term of the award. Key assumptions used in developing valuations are discussed with independent third party valuation experts.

Derivative financial instruments

     Genesis has entered into derivative instruments to hedge the risk of variability in the cash flows associated with the floating interest rate payments on the borrowings incurred to finance a portion of the consideration paid for its portfolio of aircraft and also to hedge against the variability in the U.S. dollar to Euro foreign exchange rates. Genesis accounts for derivative instruments in accordance with SFAS 133, Accounting for Derivative Instruments and Hedging Activities, as amended and interpreted. In accordance with SFAS 133, all derivatives are recognized on the balance sheet at their fair value. Fair value may depend on the credit rating and risk attaching to the counterparty of the derivative contracts. When cash flow hedge accounting treatment is achieved under SFAS 133, the changes in fair values related to the effective portion of the derivatives are recorded in accumulated other comprehensive income, and the ineffective portion is recognized immediately in income. Changes in fair value related to the effective portion of the derivatives are reclassified out of accumulated other comprehensive income into income for any ineffective portion of the derivative contract which is calculated at each quarter end. Amounts reflected in accumulated other comprehensive income related to the effective portion are reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. Changes in the fair value of forward foreign exchange contracts are recognized immediately in income.

Results of Operations

The following table reflects the combined and consolidated Statement of Income for the year ended December 31, 2006, and the consolidated Statement of Income for the years ended December 31, 2007 and 2008. The combined and consolidated results do not purport to reflect the results that would have been obtained had the IPO occurred at the beginning of 2006.

		Combined
		and
		Consolidated				Consolidated				Consolidated
		Years Ended December 31,
		2006				2007				2008
		(USD in thousands, except share and per share data)
Revenues
Rental of Flight Equipment		$	153,187			$	181,333			$	215,985
Other income			—				6,771				8,045
Total revenue			153,187				188,104				224,030
Expenses
Depreciation			51,398				62,259				78,690
Interest			46,026				55,236				70,971
Maintenance expense			2,327				1,073				3,344
Selling, general and administrative			7,312				20,991				23,884
Other expenses			—				3,337				—
Total operating expenses			107,063				142,896				176,889
Income Before Taxes			46,124				45,208				47,141
Provision for income taxes			17,367				6,053				6,224
Net Income		$	28,757			$	39,155			$	40,917

Year Ended December 31, 2008 Compared to Year Ended December 31, 2007

     The number of aircraft in our fleet increased from 53 as at December 31, 2007 to 54 as at December 31, 2008.

     Rental revenues were $216.0 million for the year ended December 31, 2008, which increased by 19.1% from $181.3 million for the year ended December 31, 2007. This increase was primarily due to (1) the acquisition of additional aircraft during 2007 that generated $32.0 million of additional rental revenues (2) the acquisition of an aircraft in 2008 that generated additional rental revenues of $3.7 million, offset by (1) a net reduction in revenues of $0.4 million related to lease defaults during 2008 and (2) a reduction of $0.6 million due to reduced LIBOR rates in respect of floating leases.

     Other income was $8.0 million for the year ended December 31, 2008, compared to $6.8 million for the year ended December 31, 2007. The increase in other income was primarily due to the gain of $6.0 million on the repurchase of debt securities, offset by a reduction in interest income of $4.8 million due to lower cash balances and a decrease in interest rates. During the year ended December 31, 2008, we repurchased $13.5 million aggregate principal amount of securitization notes for a total price of $7.5 million. The purchases resulted in the recognition of a realized gain of $6.0 million for the year ended December 31, 2008.

     Depreciation of flight equipment was $78.7 million for the year ended December 31, 2008, which increased by 26.4% from $62.3 million for the year ended December 31, 2007. This increase was primarily

due to (1) an increase of $12.0 million from the acquisition of additional aircraft (2) a charge of $1.1 million related to the write-off of lessee-specific capital improvements following a lease termination, and (3) an increase of $3.3 million primarily related to the amortization of capitalized major maintenance. During the three months ended March 31, 2008, and as part of on-going periodic reviews, we revised our estimate of the intervals to the next overhaul. The effects of this change in accounting estimate on our financial statements for the year ended December 31, 2008, is as follows:

Increase in:
Net income		$3.0 million
Earnings per share		$	0.08

     Interest expense was $71.0 million for the year ended December 31, 2008, which increased by 28.5% from $55.2 million for the year ended December 31, 2007. This increase was primarily due to (1) $13.2 million of interest expense associated with the financing of additional aircraft acquired in 2007 and 2008, and (2) a $2.5 million increase in the amortization of deferred financing costs and commitment fees in connection with new debt and our exercise of the option to increase the availability under Genesis Acquisition’s revolving credit facility.

     Maintenance expense was $3.3 million for the year ended December 31, 2008, which increased by 211.6% from $1.0 million for the year ended December 31, 2007. Maintenance expense primarily reflects costs associated with the repossession and re-marketing of aircraft subject to lease terminations during 2008 offset by the recognition of security in accordance with those leases. During 2008, a total of six leases were terminated while in 2007 there were no defaults.

     Selling, general and administrative expenses were $23.9 million for the year ended December 31, 2008, which increased by 13.8% from $21.0 million for the year ended December 31, 2007. This increase was due to (1) increased personnel costs of $0.5 million reflecting the increased costs associated with additional hires in 2008 (2) $0.9 million in increased servicer fees due to additional aircraft acquired and (3) a $1.5 million increase in other expenses.

     Provision for income taxes was $6.2 million reflecting an actual tax rate of 13.2% for the year ended December 31, 2008, compared to a charge of $6.1 million reflecting an actual tax rate of 13.4% for the year ended December 31, 2007.

Year Ended December 31, 2007 Compared to Year Ended December 31, 2006

     The number of aircraft in our fleet increased from 41 as at December 31, 2006 to 53 as at December 31, 2007.

     Rental revenues were $181.3 million for the year ended December 31, 2007, which increased 18.4% from $153.2 million for the year end December 31, 2006. This increase was primarily due to (1) the purchase of four aircraft in 2006 that generated an additional $13.3 million of revenue during the year ended December 31, 2007 and (2) the purchase of 12 aircraft in 2007 that generated additional revenue of $15.8 million during the year ended December 31, 2007.

     Other income was $6.8 million for the year ended December 31, 2007 compared to nil for the year ended December 31, 2006. The increase was due to interest income generated on cash investments.

     Depreciation of flight equipment was $62.3 million for the year ended December 31, 2007 which increased by 21.1% from $51.4 million for the year ended December 31, 2006. This increase was due primarily to (1) additional depreciation of $4.6 million on the four aircraft acquired during the year ended December 31, 2006, (2) additional depreciation of $4.6

million on the 12 aircraft during the year ended December 31, 2007 and (3) additional depreciation related to capitalized maintenance for the year ended December 31, 2007.

     Interest expense was $55.2 million for the year ended December 31, 2007, which increased by 20.0% from $46.0 million for the year ended December 31, 2006. The predecessor’s condensed combined financial statements for the year ended December 31, 2006 include an allocation from GE of interest expense of $44.5 million. On December 19, 2006, Genesis issued $810 million of aircraft lease-backed notes as part of a securitization transaction. The interest expense of $55.2 million for the year ended December 31, 2007 includes the amortization of financing costs of $3.9 million and reflects the costs associated with borrowings under the securitization notes and the revolving credit facility.

     Maintenance expense was $1.1 million for the year ended December 31, 2007, which decreased by 53.9% from $2.3 million recorded for the year ended December 31, 2006. The decrease was related to the reduced expense associated with transitioning aircraft for delivery to new lessees.

     Selling, general and administrative expenses were $21.0 million for the year ended December 31, 2007, which increased by 187.1% from $7.3 million for the year ended December 31, 2006. The predecessor’s condensed combined financial statements for the year ended December 31, 2006 include an expense allocation from GE of expense of $3.9 million. This increase of $13.7 million was due to the additional costs of establishing and operating as an independent standalone company, including increased employee and facilities expenses as well as public company expenses, as well as costs associated with servicing the additional aircraft that we acquired during 2006 and 2007.

     Other expenses increased by $3.3 million for the year ended December 31, 2007 compared to nil in the year ended December 31, 2006. These costs relate to a transaction where the likelihood of proceeding with this transaction within the foreseeable future is considered remote.

     Provision for income taxes was $6.1 million for the year ended December 31, 2007, which decreased by 65.1% from $17.4 million recorded for the year ended December 31, 2006. The predecessor’s condensed combined financial statements for the year ended December 31, 2006 reflect income taxes as if the predecessor had been a separate taxable entity resident in the United States with an effective tax rate of 37.1%. The provision for income taxes of $6.1 million reported by Genesis for the year ended December 31, 2007 reflects the fact that Genesis is a separate taxable entity, resident in Ireland.

B. Liquidity and Capital Resources

Our Cash Flows

Year Ended December 31, 2008 compared to Year Ended December 31, 2007

     Cash flows from operations were $120.4 million for the year ended December 31, 2008, compared with $118.7 million for the year ended December 31, 2007. The increase was primarily the result of $7.1 million of increased cash flows from leasing activities offset by an increase of $5.4 million in restricted cash during the year ended December 31, 2008.

     Cash flows from investing activities relate primarily to the purchase of fixed assets, purchase of aircraft, capitalized major maintenance events on the aircraft and the designation of certain restricted cash balances. Cash used in investing activities in the year ended December 31, 2008, was $98.3 million compared with $405.6 million for the same period in 2007. The decrease in cash used in investing activities was primarily due to lower acquisitions of aircraft, offset by an increase in capitalized major maintenance costs and an increase in restricted cash balances for the year ended December 31, 2008.

     Cash flows from financing activities relate primarily to the proceeds from issuance of common shares, proceeds from financings and the payment of dividends. Cash provided by financing activities for the year ended December 31, 2008 was $8.0 million relating primarily to proceeds from borrowings of $338.0 million, offset by (1) amounts repaid on Genesis Acquisition’s revolving credit facility and other debt

financings of $247.1 million, (2) payments of $15.3 million for financing costs associated with borrowings, (3) the payment of $54.5 million in dividends, (4) payments of $5.6 million for share repurchases, and (5) payments of $7.5 million for the repurchase of the securitization notes. Cash provided by financing activities for the year ended December 31, 2007 was $290.2 million relating to (1) the proceeds of the sale of common shares in connection with the underwriters’ exercise of the over-allotment option and the concurrent private placement to GE and (2) borrowings under our revolving credit facility, offset by a the payment of $53.0 million in dividends.

Year Ended December 31, 2007 compared to Year Ended December 31, 2006

Cash flows generated from operations were $118.7 million for the year ended December 31, 2007 compared with $89.5 million for the year ended December 31, 2006. The increase in operating cash flows in 2007 compared with 2006 was primarily the result of (1) $14.2 million of increased cash flows from leasing activities, (2) $1.6 million of lower cash taxes paid than in 2006 and (3) a decrease of $13.4 million in restricted cash in the year ended December 31, 2007.

Cash flows from investing activities relate primarily to the acquisition of aircraft and the designation of certain cash balances as restricted cash. Cash used in investing activities in 2007 was $405.6 million compared with cash used in investing activities of $194.2 million in 2006.

Cash flows from financing activities were $290.2 million for the year ended December 31, 2007 compared with $131.6 million for the year ended December 31, 2006. Cash flows from financing activities in 2007 primarily relate to (1) aggregate net proceeds of $102.9 million from the sale of shares pursuant to the underwriters’ exercise of the over-allotment option in the IPO, (2) the proceeds raised from borrowings of $241.0 million under our credit facility to fund the acquisition of additional aircraft and (3) offset by dividends paid of $53.0 million.

Fair Value Measurement

     We have entered into interest rate swaps to hedge the risk of variability in the cash flows associated with the floating interest rate payments on the borrowings incurred to finance a portion of the consideration paid for our portfolio of aircraft and also to hedge against the variability in the U.S. dollar to Euro foreign exchange rates.

     All derivatives are recognized on the balance sheet at their fair value. Genesis determines fair value based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value may depend on the credit rating and risk attaching to the counterparty of the derivative contracts.

     Our policy is to maximize the use of observable inputs and minimize the use of unobservable inputs when developing fair value measurements, in accordance with the fair value hierarchy of SFAS No. 157, Fair Value Measurements (“SFAS 157”). The fair values determined by Genesis are derived principally from or corroborated by observable market data. Inputs include quoted prices for similar assets, liabilities (risk adjusted) and market-corroborated inputs, such as market comparables, interest rates, yield curves and other items that allow fair value to be determined. Due to the prevailing market conditions, Genesis applied additional inputs to the fair value determination in the form of credit spreads, credit default swaps and an assessment of the probability of its own non-performance and of default by either of the swap counterparties.

     The fair value of derivatives was $(87.0) million as at December 31, 2008, which increased 168.9% from $(32.4) million as at December 31, 2007. No gains or losses were recognized in income in respect of changes in the credit risk associated with those derivatives.

Our Future Sources of Liquidity

We operate in a capital-intensive industry. We expect to fund our capital needs from retained cash flow and debt and equity financing, including borrowings under our $1 billion revolving credit facility (described below).

On September 19, 2008, Genesis Portfolio entered into a 7-year, $241.0 million term loan facility with a syndicate of lenders. Proceeds from the facility were used to refinance the 11 Airbus A320 family and Boeing 737 aircraft that had been financed under our revolving credit facility, thereby restoring capacity under the revolver to $1 billion. As at December 31, 2008, Genesis had no borrowings under the revolving credit facility.

On October 5, 2008, Genesis Acquisition exercised its option to increase the total commitment amount under the revolving credit facility to $1 billion. The exercise of the option resulted in the payment of a fee of 1.25% of $750 million or $9.4 million, which will be amortized over the remaining life of the facility.

Our short-term liquidity needs include working capital for operations associated with our aircraft and cash to pay dividends to our shareholders. We expect that cash on hand, cash flow provided by operations and the availability of borrowings under our liquidity facility (described below) will satisfy our short-term liquidity needs with respect to our business. Our sole source of operating cash flows is currently from distributions and interest payments made to us by our subsidiaries, through which we hold all of the aircraft in our portfolio. Distributions of cash to us by our subsidiaries are subject to compliance with covenants contained in the agreements governing the securitization, our senior secured revolving credit facility and other debt facilities described below.

Our liquidity needs also include the financing of acquisitions of additional aircraft and other aviation assets that we expect will drive our growth. We plan to finance acquisitions through cash generated by the business, borrowings under our revolving credit facility and additional debt and equity issuances.

All of our principal debt facilities have financial covenants. If we are unable to comply with these covenants, then the amounts outstanding under these facilities may become immediately due and payable, cash generated by our subsidiaries may be unavailable to us and/or we may be unable to draw additional amounts under these facilities. The Initial Portfolio financed by Genesis Funding’s securitization requires that Genesis Funding maintain a debt service coverage ratio from November 2009 through November 2011 above the threshold specified under this financing. If lessees of the aircraft held by Genesis Funding default under their leases, then Genesis Funding may be unable to comply with this covenant and all available cashflow from the Initial Portfolio will be applied to the repayment of the securitization notes. Genesis Portfolio’s term loan facility requires that Genesis Portfolio maintain a loan-to-value ratio (tested annually) below the threshold specified in the facility. If aircraft values decline, then Genesis Portfolio may be unable to comply with this covenant and would be required to prepay outstanding borrowings to restore compliance with this covenant; otherwise, the amounts outstanding under the term loan facility would become immediately due and payable. Genesis Acquisition’s revolving credit facility requires that Genesis Acquisition maintain minimum ratios of earnings before interest, taxes, depreciation and amortization (“EBITDA”) to interest expense and a loan-to-value ratio (tested semi-annually) below the threshold specified in the revolving credit facility in respect of any aircraft financed through the revolving credit facility. As at December 31, 2008 there were no aircraft financed through Genesis Acquisition’s revolving credit facility. However to the extent aircraft are financed in the future and subsequently aircraft values decline and/or if lessees default under their leases, then Genesis

Acquisition may be unable to comply with the covenants and could lose the ability to make further borrowings under the revolving credit facility. The events that could cause our subsidiaries not to be in compliance with their financial covenants — such as a decline in aircraft values or lessee defaults — may be beyond our control, but they nevertheless could have a substantial adverse impact on the amount of our cash flow available to fund working capital, make capital expenditures and satisfy other needs, including payments of dividends to shareholders.

In addition, our ability to execute our business strategy to acquire additional aircraft and other aviation assets depends to a significant degree on our ability to access debt and equity capital markets. Our access to these markets will depend on a number of factors, such as our historical and expected performance, compliance with the terms of our debt agreements, industry and market trends, the availability of capital and the relative attractiveness of alternative investments. If we are unable to raise funds through debt and equity capital markets on terms that are acceptable to us, then we may be unable to implement our growth strategy of making acquisitions of additional aircraft.

Capital Expenditures

     Twelve aircraft were purchased during the year ended December 31, 2007, eight from GECAS affiliates and four from two airlines on a sale and leaseback basis. All of these aircraft were delivered to Genesis before December 31, 2007. One further aircraft was purchased from a GE affiliate during the year ended December 31, 2008. This aircraft was delivered to Genesis in June 2008.

     The acquisition has been treated as a purchase in conformity with Statement Financial Accounting Standard SFAS 141, Business Combinations. In connection with the acquisition, the assets and liabilities relating to the delivered aircraft were stated at fair value upon their respective acquisition dates. In addition to acquisitions of additional aircraft and other aviation assets, we expect to make capital expenditures from time to time in connection with improvements to our aircraft. These expenditures include the cost of major overhauls and modifications. As at December 31, 2008, the weighted average age of the aircraft in our portfolio was 6.6 years. In general, the costs of operating an aircraft, including capital expenditures, increase with the age of the aircraft.

Maintenance

Under our leases, the lessee is generally responsible for maintenance and repairs, airframe and engine overhauls, obtaining consents and approvals and compliance with return conditions of aircraft on lease. In connection with the lease of a used aircraft, we may agree to contribute specific additional amounts to the cost of certain planned major overhauls or modifications, which usually reflect the usage of the aircraft prior to the commencement of the lease. In many cases, we also agree to share with our lessees the cost of compliance with airworthiness directives.

Our portfolio includes twenty nine leases pursuant to which we collect additional rent that is determined based on usage of the aircraft measured by hours flown or cycles operated and we are obligated to make contributions to the lessee for expenses incurred for certain planned major maintenance, including amounts typically determined based on additional rent paid by the lessee. Such planned major maintenance includes heavy airframe, off-wing engine, landing gear and auxiliary power unit overhauls and replacements of engine life limited parts. We are not obligated to make maintenance contributions under such leases at any time that a lessee default is continuing. While the costs of future planned major maintenance is difficult to forecast, maintenance contributions in 2009 are expected to be considerably higher than in 2008 due to the timing of the required maintenance contributions on these 29 aircraft.

Under the remaining 21 leases in our portfolio, we are not obligated to make any maintenance contributions. However, these 21 leases provide for a lease-end adjustment payment based on the usage of the aircraft during the lease and its condition upon return. Most such payments are likely to be made by the lessee to us, although contributions may be required to be made by us for certain planned major maintenance activities.

Seasonality

Our aircraft are leased under long-term contracts and are not subject to the effect of seasonal variation in demand.

Securitization

     Concurrently with the completion of our IPO, Genesis Funding completed a securitization transaction that generated net proceeds of approximately $794.3 million after deducting initial purchasers’ discounts and fees. Under the terms of the securitization, a single class of notes were initially issued by Genesis Funding. The notes are direct obligations of Genesis Funding and are not obligations of, or guaranteed by, GE, any of its affiliates or Genesis Lease Limited. The proceeds from the sale of the notes, together with the proceeds from the IPO and the private placement of shares to GE, less certain expenses related to the securitization and the IPO and a cash balance that we retained, were used by Genesis Funding to finance the acquisition of the Initial Portfolio of 41 aircraft.

     The notes have the benefit of a financial guaranty insurance policy issued by Financial Guaranty Insurance Company, or FGIC, which has issued a financial guaranty insurance policy to support the payment of interest when due on the notes and the payment of the outstanding principal balance of the notes on the final maturity date of the notes and, under certain other circumstances, prior thereto.

     The notes initially were rated Aaa and AAA by Moody’s Investors Service, Inc., or Moody’s, and Standard & Poor’s Rating Services, a division of The McGraw-Hill Companies, Inc., or S&P, respectively. This rating was based on FGIC’s rating. FGIC has suffered significant downgrades of its ratings since the issuance of the notes and is currently rated Ca and CC by Moody’s and S&P, respectively. As a result, Moody’s and S&P have published stand-alone ratings of the notes of A3 and A-, respectively

     The notes were issued pursuant to the terms of a trust indenture, dated December 19, 2006, the date of the completion of the IPO, among Genesis Funding, a cash manager, a trustee, an operating bank, a liquidity facility provider and a policy provider.

Interest Rate

     The notes bear interest at one-month LIBOR plus 0.24%. Interest expense for the securitization also includes amounts payable to the policy provider and the liquidity facility provider thereunder. Genesis Funding has also entered into an interest rate swap agreement intended to hedge the interest rate exposure associated with issuing the floating-rate obligations of the notes.

Maturity Date

     The final maturity date of the notes is December 19, 2032.

Payment Terms

     Interest on the notes are due and payable on a monthly basis. Scheduled monthly principal payments on the notes commence on December 2009, subject to satisfying certain debt service coverage ratios and other covenants. Thereafter, if the notes are not refinanced, cash flow generally will not be available to us for the payment of dividends because principal payments are not fixed in amount but rather are determined monthly based on revenues collected and costs and other liabilities incurred prior to the relevant payment date. Effectively, after December 19, 2011, all revenues collected during each monthly period will be applied to repay the outstanding principal balance of the notes, after the payment of certain expenses and other liabilities, including the fees of the service providers (including GECAS as servicer and us in our role

as manager), the liquidity facility provider and the policy provider, interest on the notes and interest rate swap payments, all in accordance with the priority of payments set forth in the indenture.

Redemption

     We may, on any payment date, redeem the notes by giving the required notices and depositing the necessary funds with the trustee. A redemption prior to acceleration of the notes may be of the whole or any part of the notes. A redemption after acceleration of the notes upon default may only be for the whole of the notes. We may, on any payment date, redeem the notes in whole or from time to time in part, at the following redemption prices, expressed as percentages of principal amount, together with accrued and unpaid interest to, but excluding, the date fixed for redemption, if redeemed on the dates indicated below:

Redemption Date		Price
Before December 19, 2009		101%
On or after December 19, 2009		100%

Collateral

     The notes are secured by first priority, perfected security interests in and pledges or assignments of equity ownership and beneficial interests in the subsidiaries of Genesis Funding, their interests in the leases of the aircraft they own, cash held by or for them and by their rights under agreements with GECAS, the initial liquidity facility provider, hedge counterparties and the policy provider. The notes are also secured by a lien or similar interest in any of the aircraft in the Initial Portfolio that are registered in the United States or Ireland.

Certain Covenants

     Genesis Funding is subject to certain operating covenants including relating to the maintenance, registration and insurance of the aircraft as set forth in the indenture. The indenture also contains certain conditions and constraints which relate to the servicing and management of the Initial Portfolio including covenants relating to the disposition of aircraft, lease concentration limits, restrictions on the acquisition of additional aircraft and restrictions on the modification of aircraft and capital expenditures as described below. GECAS has agreed to use commercially reasonable efforts to perform its services pursuant to the servicing agreement for our Initial Portfolio, subject to certain provisions of the indenture as they relate to the services provided by GECAS thereunder. As at December 31, 2008, Genesis Funding is in compliance with the terms of the covenants under the indenture.

Liquidity Facility

Genesis Funding and Calyon are parties to a revolving credit facility, which is referred to as the liquidity facility. The aggregate amount available under the liquidity facility is $75 million, $60 million of which may be drawn to cover certain expenses of Genesis Funding, including maintenance expenses, interest rate swap payments and interest on the notes issued under the indenture and the remaining $15 million of which is available for three years from the completion of the IPO to cover any shortfalls in the separate account set aside for overhauls and certain parts replacements. Genesis Funding is required to reimburse the provider of the liquidity facility for the amount of such drawing plus accrued interest from funds available as specified in the indenture. Any amounts under the liquidity facility advanced for overhauls and replacements remaining outstanding after the third anniversary of the IPO will be due in an amount equal to $625,000 per month. Upon the occurrence of certain events, including a downgrade of the provider of the liquidity facility below a certain ratings threshold, the liquidity facility will be drawn in full, and such drawings will be available for the same purposes as drawings under the liquidity facility.

     Drawings under the liquidity facility bear interest at one-month LIBOR plus a spread of 120 basis points. Genesis Funding paid an upfront fee of $450,000 on December 19, 2006 and will pay an annual

commitment fee of 60 basis points on each payment date. As at December 31, 2008, Genesis Funding had drawn down $5.0 million under the liquidity facility.

Term Loan Facilities

     During 2008, Genesis secured new term loans in the aggregate amount of $92 million to finance the acquisition of a Boeing 767-300ER aircraft and to leverage an Airbus A320-200 aircraft that Genesis acquired during 2007. These loans bear interest at a fixed and floating rate (based on LIBOR plus a margin), respectively, are secured with the underlying aircraft and mature in 2018 and 2019. The loans are subject to certain covenants, with which we are in compliance with as at December 31, 2008.

     During 2008, Genesis Portfolio also entered into a 7-year, $241.0 million term loan facility with a syndicate of lenders. The term loan facility was drawn down in one tranche on September 19, 2008. Proceeds from the drawdown were used to refinance the 11 Airbus A320 family and Boeing 737 aircraft that previously had been owned by Genesis Acquisition and financed through Genesis Acquisition’s revolving credit facility.

     The principal terms of Genesis Portfolio’s term loan facility are as follows:

     Fees. An up-front fee equal to 1.1% of the facility amount of $241.0 million and an upfront administration fee of $0.4 million was payable upon entry into the facility. In addition, an agency fee of $55,000 is payable annually.

     Interest Rate. Borrowings under the facility bear interest at LIBOR plus an applicable margin of 1.75% per annum. Under certain circumstances, when LIBOR may not be representative of the wholesale bank cost of funds or be available as a reference rate, the facility includes provisions for the negotiation of another basis for the calculation of the interest rate, which requires the prior consent of all parties to the facility.

     Maturity Date; Payment Terms. Borrowings under the facility are required to be repaid in monthly installments of principal and interest with the balance payable as a balloon payment of $125.0 million at maturity in September 2015.

     Prepayment. Genesis Portfolio has the right to prepay any amounts outstanding under the facility on any monthly repayment date. There is a prepayment penalty of 2% of the prepayment amount in the first year and a 1% prepayment penalty in the second year. There are no prepayment penalties thereafter. In addition, Genesis Portfolio will be required to make partial prepayments of borrowings under the facility upon the total loss, sale or other disposition of aircraft financed with borrowings under the facility.

     Guarantee. Genesis Lease Limited has guaranteed all payments of principal and interest owed under the facility.

     Collateral. Borrowings under the facility are secured by first priority, perfected security interests in and pledges or assignments of (1) the equity ownership and beneficial interests of Genesis Lease Limited in Genesis Portfolio and in each of its aircraft-owning subsidiaries, (2) leases of the aircraft financed under the facility and mortgages over the aircraft themselves, (3) Genesis Portfolio interests in the Servicing Agreement in place with GECAS under which those leases are serviced, and (4) where possible, an international interest under the Cape Town Convention in each eligible airframe, engine and lease. In addition, Genesis Portfolio is required to hold $5.0 million on deposit in a liquidity reserve account.

     Covenants. Genesis Portfolio is subject to certain operating covenants including some relating to the maintenance, registration and insurance of the aircraft as set forth in the facility and associated deed of proceeds and priorities (the “DPP”). The DPP and the facility also contain certain conditions and constraints which relate to the servicing and management of the aircraft financed through the facility, including covenants relating to the disposition of aircraft, restrictions on the acquisition of additional aircraft and restrictions on the modification of aircraft. In addition, Genesis Portfolio is subject to annual loan-to-value tests of 75% for the first four years and of 70% thereafter based on its maintenance adjusted current market

value on each anniversary of the first drawdown. Genesis Portfolio is in compliance with all covenants as at December 31, 2008.

Revolving Credit Facility

     On April 5, 2007, Genesis Acquisition entered into a $1 billion senior secured revolving credit facility with a syndicate of lenders. The revolving credit facility provides funding for 65.0-72.5% (depending on aircraft type) of the agreed value of the aircraft that Genesis Acquisition may acquire.

     In connection with the closing of the revolving credit facility, GECAS refunded fees and related expenses of $7.2 million initially borne by Genesis Acquisition. Genesis recorded this amount as deferred financing costs with an offsetting credit to Additional paid in capital. An amount of $3.2 million was amortized for the year ended December 31, 2007 with a further $2.0 million amortized in the year ended December 31, 2008.

     On October 5, 2008, Genesis Acquisition exercised its option to increase the total commitment amount under the revolving credit facility to $1 billion. The exercise of the option resulted in the payment of $9.4 million, which will be amortized into interest expense over the remaining expected life of the revolving credit facility. An amount of $0.7 million was amortized in the year ended December 31, 2008.

     On September 19, 2008, Genesis secured a new $241.0 million debt facility, the proceeds of which were used to refinance Genesis Acquisition’s borrowings under the revolving credit facility. Following the refinancing, Genesis Acquisition owned no aircraft and had no borrowings outstanding under the credit facility. Some of the lenders under the revolving credit facility took the position that because Genesis Acquisition generated no income from aircraft leasing activities during the fourth quarter of 2008, it was unable to comply with an obligation to maintain a minimum ratio of EBITDA to interest expense. Genesis believed that such test should not apply under these circumstances, and in any event, to the extent any non-compliance did exist, Genesis firmly believed that it had cured such non-compliance pursuant to the terms of the revolving credit facility. On March 3, 2009, to overcome the difference of opinion and to clarify the future application of the EBITDA to interest expense test, Genesis Acquisition entered into an amendment which resulted in an increase in the commitment fees and interest rate under the revolving credit facility. A fee of $0.8 million was paid on March 3, 2009 to the lenders in connection with the amendment.

     Following this amendment, the principal terms of the revolving credit facility are as follows:

     Commitment fees. Commitment fees of 0.375% per annum initially were payable quarterly in arrears on the unused amount of the revolving credit facility. Following the amendment, the commitment fees increased to 0.50% per annum from March, 3, 2009, and to the extent borrowings under the revolving credit facility are less than $200.0 million on September 30, 2009, the commitment fees will increase to 0.75% from September 30, 2009.

     Interest Rate. Borrowings under the revolving credit facility bear interest at one- or three-month LIBOR plus an applicable margin. Following the amendment, the applicable margin during the revolving period increased from 1.50% — 1.75% to 2.50% — 2.75% from March 3, 2009 (the range depends on Genesis Acquisition’s portfolio composition and the principal amount outstanding under the revolving credit facility). The margin remains at 2.75% during the term loan period from April 5, 2010 to April 4, 2012 (if Genesis Acquisition exercises its option to convert the revolving credit facility to a term loan).

     Maturity Date. The commitments under the revolving credit facility are available until April 2010, at which time Genesis Acquisition will have the option to convert any outstanding amount under the revolving credit facility to a term loan with a two-year maturity to April 4, 2012. If Genesis Acquisition does not exercise this option, then the outstanding amount under the revolving credit facility at such time will be due on such date.

     Prepayment. Genesis Acquisition has the right to prepay any amounts outstanding under the revolving credit facility or to reduce the commitment thereunder. In addition, Genesis Acquisition will be required to make partial prepayments of borrowings under the revolving credit facility upon the total loss, sale or other disposition of aircraft financed with borrowings under the revolving credit facility, or if the aggregate amount of the loans outstanding under the revolving credit facility exceeds the borrowing base (as defined in the revolving credit facility), including as a result of a decrease in the value of an aircraft financed with borrowings thereunder as determined by mandatory periodic appraisals.

     Collateral. Pursuant to a security trust agreement, dated as of April 5, 2007, among Genesis Acquisition, certain affiliates of Genesis Acquisition, Citibank, N.A., as administrative agent, and Deutsche Bank Trust Company Americas, as security trustee and account bank, borrowings under the revolving credit facility are secured by first priority, perfected security interests in and pledges or assignments of (1) the equity ownership and beneficial interests of each subsidiary of Genesis Acquisition, (2) leases of the aircraft financed under the revolving credit facility, (3) rights under the casualty insurance on such aircraft, (4) accounts under the sole dominion and control of the administrative agent under the revolving credit facility into which lease rentals, insurance proceeds, sale proceeds and other amounts will be paid, and (5) where possible, an international interest under the Cape Town Convention in each eligible airframe, engine and lease.

     Covenants. Genesis Acquisition is subject to certain operating covenants including some relating to the maintenance, registration and insurance of the aircraft as set forth in the revolving credit facility. The revolving credit facility also contains certain conditions and constraints which relate to the servicing and management of the aircraft whose acquisition is financed through the revolving credit facility, including covenants relating to the disposition of aircraft, lease concentration limits, restrictions on the acquisition of additional aircraft and restrictions on the modification of aircraft, capital expenditures and the weighted average age of Genesis Acquisition’s aircraft portfolio. In addition, the revolving credit facility contains a requirement that the ratio of earnings before interest, taxes, depreciation and amortization (“EBITDA”) to interest expense for any trailing period of three consecutive months exceeds (i) 1.1 at all times and (ii) 1.5 for advances to be available under the revolving credit facility. Genesis Acquisition is in compliance with all covenants as at December 31, 2008. As disclosed in this Annual Report on Form 20-F, a difference of opinion arose between Genesis Acquisition and some of the lenders under the revolving credit facility with respect to Genesis Acquisition’s obligation to maintain a minimum ratio of EBITDA to interest expense. To overcome the difference of opinion and to clarify the future application of the EBITDA to interest expense test, Genesis Acquisition has agreed to the amendment to the revolving credit facility described herein.

C. Research and Development

Not applicable.

D. Trend Information

     Our growth strategy contemplates future acquisitions and leasing of additional commercial aircraft and other aviation assets. The following trends in the aircraft finance and leasing industries will have an impact on our ability to implement this growth strategy:

	•		General economic conditions. The long-term demand for air travel is expected to continue to grow. Although the record fuel prices seen in 2008 have materially abated, the extreme dislocation in the financial markets has continued into 2009 and a number of major economies have entered recession. These developments contributed to a number of airline bankruptcies, particularly in the United States and in Europe. While we are not immune to these developments, we are positioned to address many of these challenges given our focus on maintaining a young, modern, fuel efficient portfolio of aircraft, a well diversified global customer base, long term leases and with GECAS as our servicer. Nevertheless, the aircraft industry continues to be subject to demand shifts, and any downturn in discretionary business or consumer spending could have a significant impact on air traffic and aircraft demand.
	•		Large and growing commercial aircraft fleet to meet global demand. The ongoing trend towards growth in air travel is expected to be adversely affected in the short to medium term as a result of reduced global economic growth expectations. We do not know how long this economic downturn may prevail. Nevertheless, over the long term, we expect that economic development in emerging markets, competitive pricing resulting from the continued growth of low-cost carriers and relaxation of regulatory constraints will continue to drive further increases in air travel and aircraft demand. Boeing has forecasted that by 2027 the fleet will reach 35,800 aircraft, of which 31,910 will be mainline passenger jets with 90 passenger seats or more. Airbus has estimated that the commercial jet aircraft fleet will increase to 37,774 aircraft by 2026, of which 28,534 will be mainline passenger jets of more than 100 seats. In dollar terms, the current global fleet has an estimated value of $350 billion and is estimated to grow by at least $40 billion per year for the next 20 years.
	•		Continued growth in aircraft leasing with significant consolidation opportunities. Over the past 20 years, the world’s airlines have leased a growing share of their aircraft. According to market data, the proportion of the global fleet under operating lease has increased from 17% in 1990 to approximately 30% in recent years. Lessors are major providers of liquidity for used aircraft and provide airlines with a valuable method of fleet management through the use of operating leases, financial leases and sale/leaseback transactions. The two largest lessors, GECAS and ILFC, own or manage approximately a combined 41% of the leased aircraft lessor portfolio, while seven other lessors each controls between 3% and 5% of the lessor market. Beyond that, the operating lessor market

			is quite fragmented. We expect that leased aircraft will continue to comprise an increasing percentage of total commercial aircraft. However, there may be some short term volatility given the current credit environment and uncertain economic outlook. In addition, prospective ownership changes of certain aircraft lessors, including ILFC, may have an impact on aircraft lease values and values, as well as the aircraft financing market. It is also quite possible that, given the fragmented nature of the lessor market, consolidation of some of these companies could occur.
	•		Aircraft values and lease rates. For a number of aircraft types, particularly the Boeing 737 Next Generation and the Airbus A320 family of aircraft, supply in recent years has been limited up until 2008. However, the airline industry has been subject to cyclical demand patterns and the current economic downturn could lead to a reduction in lease rates and asset values. With the recent airline bankruptcies, some newer Boeing 737 and Airbus A320 family equipment have become available and as a result lease rates and asset values for these types may suffer some short-term decline. Meanwhile, older Boeing 737 Classic aircraft (-300, -400 & -500 series) have also become available, and we expect the lease rates and values on these types may suffer a decline for longer than the short term. Classic aircraft represent 1.9% of our total portfolio. Demand for larger aircraft types, such as newer examples of the 767-300ER and A330 continues but in the medium-term face market risks due to the emergence of newer technology and more fuel-efficient aircraft, such as the Boeing 787 and the Airbus A350.
	•		Access to capital markets. Our liquidity needs include financings to acquire additional aircraft and other aviation assets to drive our growth. We plan to finance acquisitions through borrowings under our revolving credit facility and other sources including through additional debt and equity issuances. Our ability to execute our business strategy to acquire these additional aviation assets depends to a significant degree on our ability to access debt and equity capital markets. Our access to these markets will depend on a number of factors, such as our historical and expected performance, compliance with the terms of our existing debt agreements, industry and market trends, the availability of capital and relative attractiveness of alternative investments. If we are unable to raise funds through debt and equity capital markets on terms that are acceptable to us, then we may be unable to implement our growth strategy of making acquisitions of additional aircraft that are accretive to cash flow.

E. Off-Balance Sheet Arrangements

Not applicable.

F. Contractual Obligations

Our long-term contractual obligations as at December 31, 2008, consist of the following:

		Year Ended
		2009				2010				2011				2012				2013				Thereafter				Total
Principal payments under securitization notes (1)		$	1,000			$	12,000			$	14,615			$	70,206			$	68,351			$	630,328			$	796,500
Interest payments under securitization notes (2)			45,266				45,321				45,388				—				—				—				135,975
Principal payments under debt facilities (3)			24,893				20,746				21,639				22,551				23,553				218,511				331,893
Interest payments under debt facilities (4)			18,074				16,569				12,502				9,702				3,059				9,906				69,812
Commitment fees payable under credit facility (5)			5,497				1,979				—				—				—				—				7,476
Fixed payments to GECAS under our servicing agreements (6)			2,305				2,305				2,305				2,305				2,305				18,436				29,961
Total		$	97,035			$	98,920			$	96,449			$	104,764			$	97,268			$	877,181			$	1,371,617

G. Safe Harbor

See “Preliminary Note” in the introduction to this Annual Report.

Item 6. Directors, Senior Management and Employees

A. Directors and Senior Management

The following table presents information about our directors and executive officers. The business address of each of our directors and executive officers listed below is 4450 Atlantic Avenue, Westpark, Shannon, Co Clare, Ireland. Our telephone number at that address is +353 61 233 300.

Name		Age				Position
John McMahon			47			Chairman, Chief Executive Officer and President
Alan Jenkins			36			Chief Financial Officer
Cian Dooley			42			Chief Commercial Officer
Paul T. Dacier			51			Director
Michael Gradon			49			Director
Niall Greene			65			Director
Brian Hayden			61			Director
David C. Hurley			68			Director
Declan McSweeney			55			Director
Andrew L. Wallace			65			Director

John McMahon has been our Chairman, Chief Executive Officer and President since our formation in July 2006. Mr. McMahon has 22 years of global experience in the aviation industry. Immediately prior to joining our company, Mr. McMahon was founder and managing director of an aviation investment consulting firm that was engaged by GECAS to assist with our formation and our IPO. He began his aviation career in 1986 at Ireland’s national airline, Aer Lingus, where his experience included responsibility for fleet planning and route planning. In 1990, he joined GPA Group, then the world’s leading aircraft lessor, to develop and market investment products based on operating leases, with a particular focus on Japan. He transferred to GECAS upon its formation in 1993 when it assumed management responsibility for GPA’s aircraft lease portfolio. In 1995, Mr. McMahon joined the Daimler-Benz (now Daimler) project team to establish its associated aircraft leasing company, debis AirFinance (now AerCap) in Amsterdam. He was instrumental in growing the company from a start-up into a major global player. In 2003, he moved from his position as Managing Director of debis AirFinance to become Deputy Director of Structured Asset Finance at Lloyds TSB Bank plc in London. He founded Aviation Investment Management Company in 2004, through which he acted as consultant on a number of large-scale aircraft leasing-related private equity projects. Mr. McMahon received a Bachelor of Engineering degree from the National University of Ireland and graduate diplomas in accounting and finance (Association of Chartered Certified Accountants), management (University of Dublin, Trinity College) and computer modeling & simulation (University of Dublin, Trinity College). He has also completed the Advanced Management Program at Harvard Business School.

Alan Jenkins has been our Chief Financial Officer since October 2006. Mr. Jenkins has a substantial background in the aircraft leasing and financial services sectors. Prior to joining us, from March 2001 through to September 2006, Mr. Jenkins worked with AWAS, a leading aircraft leasing company which was owned by Morgan Stanley until the sale of the business in March 2006 to Terra Firma Capital Partners. He was based in Sydney, Australia and held the position of Vice President, Commercial from mid-2002 until joining us in October 2006 and

was responsible for the creation and development of the commercial operations of the company. The role involved structuring transactions, evaluating risks, negotiating restructurings and other amendments to contracts and advising the company on all lease and trading related decisions. Prior to AWAS, Mr. Jenkins held the position of audit manager with KPMG in Dublin, Ireland. He worked in KPMG’s financial services division for three years with responsibility for a number of aircraft leasing clients, including GPA Group (subsequently renamed AerFi Group) and the Airbus leasing operations in Dublin. Mr. Jenkins is a Fellow of The Association of Chartered Certified Accountants (ACCA) having qualified in 1995 from Accountancy and Business College Dublin.

Cian Dooley has been our Chief Commercial Officer since January 2007. Mr. Dooley has more than 19 years of experience in the aviation and financial services industries, most recently at Boeing Capital Corporation, which he joined in 2001. From 2003 until the end of 2006, he was Managing Director, Aircraft Financial Services based in Seattle, where he was responsible for capital markets and customer financing activities related to the Boeing 787 Dreamliner and the Boeing 747-8 Programs. Prior to this, Mr. Dooley worked for Boeing in Dublin, Ireland and was responsible for conducting financing transactions for Boeing’s European customer base. Before joining Boeing, Mr. Dooley spent five years at Rabobank, where he originated, structured and executed financing transactions. Prior thereto, Mr. Dooley worked at GE Commercial Aviation Services and debis AirFinance (now Aercap), where he held responsibility for negotiating many aircraft acquisition, financing and leasing transactions. Mr. Dooley received a BSc degree in experimental physics from University College Galway.

Paul T. Dacier has been a member of our board of directors since November 2007. Mr. Dacier is Executive Vice President and General Counsel of EMC Corporation, an information infrastructure technology and solutions company. Mr. Dacier joined EMC as Corporate Counsel in 1990 and was promoted to General Counsel in 1992, Vice President in 1993, Senior Vice President in 2000 and Executive Vice President in 2006. Prior to joining EMC, he was an attorney with Apollo Computer, Inc., a computer work station company, from 1984 to 1990. Mr. Dacier served as a commissioner of the Massachusetts Judicial Nominating Commission from 2003 to 2006. He also is a past Chair and remains on the Board of Directors of the New England Legal Foundation, a business appellate advocacy group. Mr. Dacier received a B.A. in History and a J.D. from Marquette University. He is admitted to practice law in the Commonwealth of Massachusetts and the State of Wisconsin.

Michael Gradon has been a member of our board of directors since November 2007. Mr. Gradon was an executive and attorney with The Peninsular and Oriental Steam Navigation Company (P&O) for more than 20 years. He retired from P&O in June 2006 following its takeover by Dubai Ports World. He was P&O’s Executive Director for Commercial and Legal Affairs from 2001 until June 2006 and a main board director of P&O from 1998 until 2006. Other roles at P&O included being Chairman of P&O’s real estate business, Chairman of La Manga Club, a leading European leisure resort, and Chief Executive of the London Gateway infrastructure project. Prior to joining P&O in 1986, Mr. Gradon was a solicitor with Slaughter & May in London. Mr. Gradon is currently senior independent director of Modern Water plc, an independent director of Grosvenor Limited and a member of the Committee of the All England Lawn Tennis Club, which operates the business and events of the Wimbledon Tennis Championships. He received an MA degree in Law from Cambridge University.

Niall Greene has been a member of our board of directors since October 2006. He is the vice chair of the board of Aviareto Limited, a company that holds the contract from the International Civil Aviation Organization for the management of the International Registry of Mobile Assets and is chair of the board of Blade Engine Securitization Limited. He has more than 40 years of experience working in the aviation industry, including with Aer Lingus, GPA Group and GECAS. At GPA Group and GECAS, he held various senior management positions in marketing, corporate communications and business development. Mr. Greene received a law degree from the University of Limerick.

Brian Hayden has been a member of our board of directors since February 2008. Mr. Hayden was employed by General Electric Commercial Aviation Services (GECAS) from 1993 until his retirement at the end of 2008. During his tenure with GECAS, he served as Executive Vice President and the Head of GECAS’ office in Shannon, Ireland, as well as the GE National Executive Director for the Republic of Ireland. He also served as Chairman of the Board and President of GECAT, then a pilot training subsidiary of GECAS. From 1989 to 1993, he was Senior Vice President of the technical division of GPA Group, a commercial aircraft leasing company based in Shannon. Mr. Hayden began his career with Aer Lingus in 1970 where he held various management positions. Mr. Hayden graduated as a Chartered Mechanical Engineer and is a Fellow of the Institution of Engineers of Ireland. He was awarded an MSc by Trinity College Dublin and subsequently earned an MBA from University College Dublin. He is a director of Airplanes Limited.

David C. Hurley has been a member of our board of directors since October 2006. Mr. Hurley is the Vice Chairman of PrivatAir of Geneva, Switzerland, a company with significant business aviation services in the United States and Europe. Prior to his appointment with PrivatAir in 2001, Mr. Hurley was the Chief Executive Officer of Flight Services Group, a company he founded in 1984, which he grew into one of the world’s largest providers of corporate aircraft management, executive charter and aircraft sales and acquisitions in the United States. Mr. Hurley currently also serves on the boards of directors of Genesee & Wyoming Inc., Hexcel, Inc., Aviation Partners Boeing, ExelTech Aerospace, Inc., The Smithsonian Institution’s National Air and Space Museum, Corporate Angel Network and CAMP Systems.

Declan McSweeney has been a member of our board of directors since November 2007. He has over 30 years of experience in banking, including 28 years with Allied Irish Banks plc, where he was Chief Financial Officer from 1997 to 2005. Prior to joining Allied Irish Banks, Mr. McSweeney worked with KPMG in Ireland and the United States from 1973 to 1978. In 2007-08, he was the Chief Financial Officer of Home Credit Group and a member of the Board of Directors of Home Credit B.V., a provider of consumer finance products in Central Europe, Eastern Europe and Asia. Mr. McSweeney is a Chartered Accountant by profession and is a graduate in Commerce from University College Dublin.

Andrew L. Wallace has been a member of our board of directors since October 2006. Mr. Wallace had 40 years of experience at Deloitte & Touche LLP before retiring in June 2006. Mr. Wallace served as an audit partner at Deloitte for 27 years, primarily serving large multi-national public companies. His broad industry experience includes large public company clients in the manufacturing, retail/distribution, commodities and satellite services industries. He also served as a member of Deloitte’s Tri-State Management Committee. Mr. Wallace received a BS in Accounting from Kent State University.

B. Compensation

Compensation of Directors and Officers

Each non-executive member of our board of directors receives an annual cash retainer of $100,000 payable in equal quarterly installments and pro rated for the initial quarter. The lead independent director (currently Mr. Greene) and the Audit Committee chairman receive an additional $25,000 per year, and the chairman of each other standing committee receives an additional $10,000 per year. In addition, each member of a committee who is not the chairman of that committee receives $5,000 per year. Each director is also reimbursed for out-of-pocket expenses incurred while attending any meeting of the board of directors or any board committee. Company employees who also serve as directors do not receive compensation for their services as directors.

During the year ended December 31, 2008, we paid to our directors and officers aggregate cash compensation of $3.5 million. In addition, our directors and officers were granted an aggregate of 47,180 restricted shares. The fair value attributable to the restricted shares was $0.7 million. For further information regarding our restricted shares, see Note 14, “Share-Based Compensation,” in the notes to the financial statements.

We have entered into directors’ service agreements with our directors, pursuant to which we have agreed to indemnify them against any liability brought against them by reason of their service as directors, except in cases where such liability arises from fraud, dishonesty, bad faith, gross negligence, willful default or willful misfeasance.

Change of Control Benefits

We believe the best time to consider the appropriateness of change of control provisions is when a change of control is not imminent and before the lack of such a plan poses a risk to the effectiveness of our employees. We seek to balance the potential costs of change of control provisions with the costs that would arise from fear of job loss and other distractions that may result from potential, rumored or actual changes of control. As a result, after careful evaluation of the implications and economics of a change of control plan, on February 24, 2009, we adopted the Genesis Lease Limited Change of Control Plan (the “Change of Control Plan”). Pursuant to the Change of Control Plan, if, within the one-year period following a change of control of Genesis, an employee’s employment is terminated for any reason other than cause or is terminated by the employee for good reason (each as defined in the Change of Control Plan), (a) each employee who has been employed for at least one year prior to the date of termination will be paid a lump-sum amount equal to the employee’s then-current annual base salary (or, if greater, the annual base salary as of the date of the change of control), and (b) each employee who has been employed for less than one year prior to the date of termination will be paid a lump-sum amount equal to the greater of (i) such employee’s then-current annual base salary (or, if greater, the annual base salary as of the date of the change of control) pro-rated to the amount of time the employee has been employed with Genesis, or (ii) one-quarter of such employee’s then-current annual base salary (or, if greater, one-quarter of the annual base salary as of the date of the change of control). To the extent that an employee has a separate employment agreement, the payment provided for under the Change of Control Plan will be in addition to any payments to which such employee is entitled under such employment agreement, including change of control payments, but excluding payments in respect of notice periods (with the exception of benefits in kind, such as pension payments, health coverage, etc., which would be available during such notice periods).

Equity Incentive Plan

We have adopted a share incentive plan for our employees and directors. The purpose of the plan is to promote our interests and the interests of our shareholders by (1) attracting and retaining exceptional officers, directors and other key employees; (2) motivating such individuals by means of performance-related incentives to achieve long-range performance

goals; and (3) enabling such individuals to participate in our long-term growth and financial success.

The plan is administered by the compensation committee of our board of directors. The committee is authorized to interpret the plan, to establish, amend and rescind any rules and regulations relating to the plan, and to make any other determinations that it deems necessary or desirable for the administration of the plan. The committee will select, in its sole discretion, the participants to whom awards shall be granted under the plan and will have full power and authority to establish the terms and conditions of any award, consistent with the provisions of the plan and to waive any such terms and conditions at any time (including, without limitation, accelerating or waiving any vesting conditions).

Awards granted under the plan may be made in the form of (1) options, (2) share appreciation rights, including limited share appreciation rights and (3) other share-based awards. The maximum number of our common shares that may be issued for awards under the plan is 3,000,000, subject to adjustments. Unless otherwise determined by the committee, any of the shares issued in respect of any award granted under the plan will be in the form of ADSs. If, after the effective date of the plan, any share covered by an award granted under the plan, or to which such an award relates, is forfeited, or if an award has expired, terminated or been canceled for any reason whatsoever without consideration therefore, then the shares covered by such award shall again be, or shall become, shares with respect to which awards may be granted under the plan. Any shares delivered to us as part or full payment for the purchase price of an award granted under the plan or to satisfy our withholding obligation with respect to an award granted under the plan, shall again be available for awards under the Plan. Awards may be made under the plan in assumption of, or in substitution for, outstanding awards previously granted by us or our affiliates or a company acquired by us or with which we combine. The number of shares underlying any such assumed or substitute awards shall be counted against the aggregate number of shares which are available for grant under awards made under the plan. No award may be granted under the plan after the tenth anniversary of the plan’s effective date, but awards granted under the plan prior to such date may extend beyond that date.

Awards granted under the plan shall be evidenced by award agreements (which need not be identical) that provide additional terms and conditions associated with such awards, as determined by the committee in its sole discretion; provided, however, that in the event of any conflict between the provisions of the plan and any such agreement, the provisions of the plan shall prevail.

Options granted under the plan are subject to such terms, including exercise price (which will not be less than the greater of the fair market value or the par value of the shares on the date of the option grant) and conditions and timing of exercise, as may be determined by the committee. Payment in respect of the exercise of an option granted under the plan may be made in cash or, if and to the extent permitted by the committee, (1) in shares having a fair market value equal to the aggregate exercise price for the shares being purchased and satisfying such other requirements as may be imposed by the committee, (2) partly in cash and, to the extent permitted by the committee, partly in such shares or (3) if there is a public market for the shares at such time, through the delivery of irrevocable instructions to a broker to sell shares obtained upon the exercise of the option and to deliver promptly to us an amount out of the proceeds of such sale equal to the aggregate exercise price for the shares being

purchased; provided, in each case, that such method results in the shares being issued as fully paid under Bermuda law.

The committee also may grant share appreciation rights (including limited share appreciation rights). Each share appreciation right shall entitle a participant upon exercise to an amount equal to the product of (1) the excess of (A) the fair market value on the exercise date of one share over (B) the per share exercise price of the share appreciation right and (2) the number of shares covered by the share appreciation right. The exercise price of a share appreciation right shall be an amount determined by the committee, but in no event shall such amount be less than the greater of the fair market value or the par value of a share on the date such share appreciation right is granted. The share appreciation right shall be evidenced by an award agreement which shall specify the terms and conditions of such award, as determined by the committee in its sole discretion, including the number of shares covered by the share appreciation right, the period over which the share appreciation right may be exercised and such other terms and conditions not inconsistent with the plan. The committee shall determine whether a share appreciation right shall be settled in cash, shares or a combination of cash and shares. The committee may impose, in its discretion, such conditions upon the exercisability or transferability of share appreciation rights as it may deem fit.

Shares, restricted shares and awards that are valued in whole or in part by reference to, or are otherwise based on the fair market value of, shares (“other share-based awards”) granted under the plan shall be in such form, and dependent on such conditions, as the committee shall determine, including, without limitation, the right to receive, or vest with respect to, one or more shares (or the equivalent cash value of such shares) upon the completion of a specified period of service, the occurrence of an event and/or the attainment of performance objectives. Subject to the terms of the plan, the committee shall determine the number of shares to be awarded under (or otherwise related to) the other share-based awards, whether such awards are to be settled in cash, shares or a combination of cash and shares and all other terms and conditions of such other share-based awards.

Unless otherwise determined by the committee, an award shall not be transferable or assignable by the participant except in the event of his death (subject to the applicable laws of descent and distribution). An award exercisable after the death of a participant may be exercised by the legatees, personal representatives or distributees of the participant.

In the event of any change in our outstanding shares after the effective date of the plan by reason of any share dividend or split, reorganization, recapitalization, merger, amalgamation, consolidation, spin-off, combination or transaction or exchange of shares or other corporate exchange, or any distribution to our shareholders of shares other than regular cash dividends or any transaction similar to the foregoing, the committee in its sole discretion and without liability to any person shall make such substitution or adjustment, if any, as it deems to be equitable, as to (1) the number or kind of shares or other securities issued or reserved for issuance pursuant to the plan or pursuant to outstanding awards, (2) the exercise price of any option or share appreciation right and/or (3) any other affected terms of such awards. In the event of our change in control after the effective date of the plan, the committee is authorized (but not obligated) to make adjustments in the terms and conditions of outstanding awards, including without limitation: (1) continuation or assumption of such outstanding awards under the plan by us (if we are the surviving corporation) or by the surviving corporation or its parent; (2) substitution by the surviving corporation or its parent of awards

with substantially the same terms for such outstanding awards; (3) accelerated exercisability or vesting of and/or lapse of restrictions under all then outstanding awards immediately prior to the occurrence of such event; (4) upon written notice, provide that any outstanding awards must be exercised, to the extent then exercisable, within 15 days immediately prior to the scheduled consummation of the event, or such other period as determined by the committee (in either case contingent upon the consummation of the event), at the end of which period such awards shall terminate to the extent not so exercised within the relevant period; and (5) cancellation of all or any portion of outstanding awards by cash payment of the excess, if any, of the fair market value of the shares subject to such outstanding awards or portion thereof being canceled over the purchase price, if any, with respect to such awards or portion thereof being canceled.

The board may amend, alter, suspend, discontinue, or terminate the plan or any portion thereof, or any award (or award agreement) thereunder, at any time; provided that no such amendment, alteration, suspension, discontinuation or termination shall be made (1) without our shareholder approval if such approval is necessary to comply with any tax or regulatory requirement applicable to the plan and (2) without the consent of the participant, if such action would materially diminish any of the rights of any participant under any award theretofore granted to such participant under the plan; provided, however, the committee may amend the plan in such manner as it deems necessary to permit the granting of awards meeting the requirements of applicable laws.

C. Board Practices

Board of Directors

Our board of directors currently consists of eight members. Our bye-laws provide that the board of directors is to consist of a minimum of two and a maximum of nine directors as the board of directors may from time to time determine.

Committees of the Board

The standing committees of our board of directors consist of an audit committee, a compensation committee and a nominating and corporate governance committee. These committees are described below. Our board of directors may also establish various other committees to assist it in its responsibilities.

Audit Committee. Our Audit Committee is concerned primarily with the (1) oversight of the financial reporting process on behalf of the board and (2) the accuracy and effectiveness of the audits of our financial statements by our independent auditors. Its duties include:

	•		selecting independent auditors for approval by our shareholders;
	•		reviewing the scope of the audit to be conducted by our independent auditors, as well as the results of their audit;
	•		approving audit and non-audit services provided to us by the independent auditors;
	•		reviewing the organization and scope of our internal system of audit, financial and disclosure controls;
	•		overseeing our financial reporting activities, including our annual report, and the accounting standards and principles followed;
	•		reviewing and approving related-party transactions and preparing reports for the board of directors on such related-party transactions; and
	•		conducting other reviews relating to compliance by our employees with our policies and applicable laws.

Each of the members of the Audit Committee is an “independent” director as defined under the applicable rules of the NYSE. Mr. Wallace, Mr. Greene and Mr. Hurley have served on the Audit Committee since October 2006, and Mr. Mc Sweeney has served since November 2007. Mr. Wallace serves as chairperson.

Compensation Committee. Our Compensation Committee has two primary responsibilities: (1) to monitor our management resources, structure, succession planning, development and selection process as well as the performance of key executives; and (2) to review and approve executive compensation and broad-based and incentive compensation plans. Each of the members of the Compensation Committee is an “independent” director as defined under the applicable rules of the NYSE. Mr. Hurley has served on the Compensation Committee since October 2006, Mr. Gradon has served since November 2007, and Mr. Dacier and Mr. McSweeney have served since June 2008. Mr. Gradon serves as chairperson.

Nominating and Corporate Governance Committee. Our Nominating and Corporate Governance Committee’s responsibilities include the selection of potential candidates for our board of directors and the development and annual review of our governance principles. This committee also annually reviews director compensation and benefits and makes recommendations to our board of directors concerning the structure and membership of the other board committees. Mr. Greene has served on the Nominating and Corporate Governance Committee since October 2006, Mr. Dacier has served since November 2007, and Mr. Gradon and Mr. Wallace have served since June 2008. Mr. Dacier serves as chairperson.

D. Employees

We operate in a business that is capital-intensive, rather than labor-intensive. As at December 31, 2008, our only employees were our chief executive officer, our chief financial officer, our chief commercial officer and eighteen other direct employees, as well as two consultants who work with us on a contract basis. Management and administrative personnel will expand, as necessary, to meet our future growth needs.

E. Share Ownership

Each of our directors and officers owns less than one percent of our outstanding common shares.

Item 7. Major Shareholders and Related Party Transactions

A. Major Shareholders

     The following table sets forth certain information regarding the beneficial ownership of our ADSs by each person known by us to be a beneficial owner of more than 5% of our ADSs as at March 5, 2009:

		Shares Beneficially Owned
Name		Number				Percent
GE			3,967,500				11.6	%
Rivanna Capital, LLC (1)			1,821,753				5.3	%

As at March 5, 2009, 4,002,397 of our ADSs were held by 26 holders of record in the United States, not including ADSs held of record by Depository Trust and Clearance Corporation, or DTC. As at March 5, 2009, DTC was the holder of record of 30,220,426 ADSs.

We are not aware of any arrangements, the operation of which may at a subsequent date result in a change of control.

B. Related Party Transactions

Servicing Agreements

     Pursuant to six servicing agreements, GECAS provides Genesis with most services related to leasing its fleet of aircraft, including marketing aircraft for lease and re-lease, collecting rents and other payments from lessees, monitoring maintenance, insurance and other obligations under leases and enforcing rights against lessees. Under the servicing agreements, Genesis is required to pay GECAS a base fee of $150,000 per month for servicing the aircraft in the Initial Portfolio. Genesis is also required to pay GECAS a base fee of 0.01% per month of the purchase price of the additional aircraft acquired during 2007 and 2008. In addition, Genesis is required to pay GECAS additional servicing fees based on rents due and paid under aircraft leases and proceeds of dispositions of aircraft and certain other fees for additional services.

Asset Purchase Agreements

     On June 26, 2008, Genesis signed an asset purchase agreement to acquire a modern, wide-body commercial aircraft from an affiliate of GE. The aircraft delivered to Genesis on June 26, 2008.

Expense Agreement

     In connection with the closing of the revolving credit facility on April 5, 2007, GECAS reimbursed fees and related expenses of $7.2 million that were originally paid by Genesis Acquisition. We had recorded this amount as deferred financing costs with an offsetting credit to additional paid-in capital. Of this amount, $3.2 million was amortized to interest expense in the year ended December 31, 2007. A further amount of $2.0 million was amortized in the year ended December 31, 2008.

C. Interest of Experts and Counsel

Not applicable.

Item 8. Financial Information

A. Combined and Consolidated Financial Statements and Other Financial Information

Please see Item 18 below for additional information required to be disclosed under this Item 8.

Legal Proceedings

We have not been involved in any legal proceedings that may have, or have had, a significant effect on our business, financial position, results of operations or liquidity, and we are not aware of any proceedings that are pending or threatened that may have a material effect on our business, financial position, results of operations or liquidity. From time to time, we may be subject to legal proceedings and claims in the ordinary course of business, principally claims relating to incidents involving aircraft and claims involving the existence or breach of a lease, sale or purchase contract. We expect that claims related to incidents involving our aircraft would be covered by insurance, subject to customary deductions. However, these claims could result in the expenditure of significant financial and managerial resources, even if they lack merit and if determined adversely to us and not covered by insurance could result in significant uninsured losses.

Dividend Policy

Overview

     We generate significant cash flow from leases with a diversified group of commercial aviation customers. The distributable cash flow on which we focus is derived principally from our minimum contracted lease rentals, reduced by our net cash interest expenses, cash selling, general and administrative expenses, maintenance and cash taxes.

     We intend to distribute a portion of our cash flow to our shareholders, while retaining cash flow for reinvestment in our business. Retained cash flow may be used to fund acquisitions of aircraft and other aviation assets, make debt repayments, repurchase common shares and for other purposes, as determined by our management and board of directors. The declaration and payment of future dividends to holders of our common shares will be at the discretion of our board of directors and will depend on many factors, including our financial condition, cash flows, legal requirements and other factors as our board of directors deems relevant.

Possible Changes in Quarterly Dividends

     There are a number of factors that could affect our ability to pay dividends. For example, if we are not able to refinance the notes issued in the securitization before the principal thereof begins to amortize, our ability to pay dividends will be adversely affected if we have not developed sufficient additional sources of cash flow by then to replace the cash flows that will be applied to such principal payments. Commencing from December 19, 2011, we will be required to apply all available cash flow from our Initial Portfolio to repay the principal amount thereof on a monthly basis, and commencing on December 19, 2009, we will be required to repay $1,000,000 of the principal of the notes on a monthly basis. Other factors that may cause us not to pay dividends in the expected amounts or at all, include, but are not limited to, the following:

	•		lack of availability of cash to pay dividends due to changes in our operating cash flow, capital expenditure requirements, working capital requirements and other cash needs;
	•		our inability to refinance the notes that we have issued in the securitization before December 2011, when we will be required to apply all available cash flow from our Initial Portfolio to repay the principal amount thereof on a monthly basis;
	•		our inability to renew, extend or repay our debt facilities when due, which could prevent our subsidiaries from making any distributions to us;

	•		restrictions imposed by our financing arrangements, including under the notes issued in the securitization, our debt facilities and any indebtedness incurred in the future to refinance our existing debt or to expand our aircraft portfolio;
	•		application of funds to make and finance acquisitions of aircraft and other aviation assets;
	•		reduced levels of demand for, or value of, our aircraft;
	•		increased supply of aircraft;
	•		obsolescence of aircraft;
	•		lower lease rates on new aircraft and re-leased aircraft;
	•		delays in re-leasing our aircraft after the expiration or early termination of existing leases;
	•		impaired financial condition and liquidity of our lessees;
	•		deterioration of economic conditions in the commercial aviation industry generally;
	•		unexpected or increased fees and expenses payable under our agreements with GECAS and its affiliates and other service providers;
	•		poor performance by GECAS and its affiliates and other service providers and our limited rights to terminate them;
	•		unexpected or increased maintenance, operating or other expenses or changes in the timing thereof;
	•		a decision by our board of directors to modify or revoke its policy to distribute a portion of our cash flow available for distribution;
	•		changes in Irish tax law, the tax treaty between the United States and Ireland (the “Irish Treaty”) or our ability to qualify for the benefits of such treaty; and
	•		restrictions under Bermuda law on the amount of dividends that we may pay.

     Our growth strategy contemplates that we will fund the acquisition of additional aircraft and other aviation assets through a combination of retained cash flow and debt and equity financing. If financing is not available to us on acceptable terms, our board of directors may determine to finance or refinance acquisitions solely with cash from operations, which would reduce or even eliminate the amount of cash available for dividends.

     We are a passive foreign investment company (“PFIC”) under U.S. federal income tax rules, and our dividends will not be eligible for either the dividends-received deduction for corporate U.S. holders or treatment as “qualified dividend income” (which is taxable at the rates generally applicable to long-term capital gains) for U.S. holders taxed as individuals. U.S. holders that elect to treat us as a qualified electing fund (a “QEF election”) will not be subject to U.S. federal income tax on dividends and will instead be taxed currently on their pro rata share of our ordinary earnings as ordinary income and a pro rata share of our net capital gain as long-term capital gain, and generally capital gain from the sale, exchange or other disposition of shares held more than one year will be long-term capital gain eligible for a maximum 15% rate of taxation for non-corporate holders. U.S. holders who make a QEF election may be required to include amounts in income for U.S. federal income tax purposes in excess of amounts distributed by us.

     As a Bermuda company, our ability to pay dividends is subject to certain restrictions imposed by Bermuda law.

B. Significant Changes

Not applicable.

Item 9. The Offer and Listing

     Our ADSs, each representing one common share, are listed for trading on the NYSE under the symbol “GLS.”

     The following table sets forth the annual high and low sale prices of our ADSs on the NYSE for the periods indicated since our ADSs began trading on the NYSE.

		High				Low
Year Ended December 31, 2006		$	23.75			$	23.00
Year Ended December 31, 2007		$	28.61			$	17.00
Year Ended December 31, 2008		$	21.29			$	2.33

     The following table sets forth the quarterly high and low sale prices of our ADSs on the NYSE for the periods indicated since our ADSs began trading on the NYSE.

		High				Low
Year Ended December 31, 2006
Fourth Quarter (from December 14, 2006)		$	23.75			$	23.00
Year Ended December 31, 2007
First Quarter		$	26.80			$	22.65
Second Quarter		$	28.61			$	25.61
Third Quarter		$	28.25			$	17.92
Fourth Quarter		$	25.38			$	17.00
Year Ended December 31, 2008
First Quarter		$	21.29			$	14.21
Second Quarter		$	16.49			$	9.93
Third Quarter		$	14.18			$	8.60
Fourth Quarter		$	9.09			$	2.33

     The following table sets forth the monthly high and low sale prices of our ADSs on the NYSE for the most recent six months.

		High				Low
Month ended September 30, 2008		$	12.20			$	8.60
Month ended October 31, 2008		$	9.09			$	3.86
Month ended November 30, 2008		$	5.68			$	2.39
Month ended December 31, 2008		$	3.75			$	2.33
Month ended January 31, 2009		$	4.25			$	2.50
Month ended February 28, 2009		$	2.62			$	2.40

Item 10. Additional Information

A. Share Capital

Not applicable.

B. Memorandum and Articles of Association

Pursuant to the instructions to Form 20-F, the information called for by this Item 10.B is contained in our Registration Statement on Form F-1, as filed with the SEC on November 27, 2006, as subsequently amended, under the heading “Description of Share Capital,” and is hereby incorporated by reference.

C. Material Contracts

The following is a summary of each material contract, other than material contracts entered into in the ordinary course of business, to which we are a party, for the two years immediately preceding the date of this Annual Report.

Servicing Agreements

We entered into a master servicing agreement with GECAS on December 19, 2006, which we refer to as the Master Servicing Agreement. Genesis Funding also entered into a servicing agreement with GECAS on December 19, 2006 specifically relating to the aircraft in our Initial Portfolio, which we refer to as the Initial Portfolio Servicing Agreement, and other subsidiaries have entered into additional servicing agreements with GECAS, specifically relating to the aircraft owned, directly or indirectly, by those subsidiaries. We refer to these servicing agreements as the Subsidiary Servicing Agreements. We believe GECAS’s broad industry expertise as the manager of a fleet of approximately 1,800 aircraft owned by its affiliates and by other entities, 28 offices, its relationships with 270 passenger and cargo airline customers in 78 countries around the world and involvement in the market for aircraft acquisitions and dispositions enhance our ability to manage our portfolio effectively, to complete the acquisition and leasing of additional aircraft and to remarket aircraft as they come off lease.

The principal services being provided by GECAS under the servicing agreements are:

	•		lease marketing and remarketing, including lease negotiation;
	•		collecting rental payments and other amounts due under leases, collecting additional rent and maintenance payments where applicable, lease compliance and enforcement and accepting delivery and redelivery of aircraft under lease;
	•		aircraft dispositions;
	•		monitoring the performance of maintenance obligations of lessees under the leases in a manner consistent with the practices employed from time to time by GECAS with respect to its own aircraft;
	•		limited assistance with any financing or refinancing of our indebtedness subject to agreement or additional fees for such service;
	•		procuring legal and other professional services with respect to the lease, sale or financing of the aircraft, any amendment or modification of any lease, the enforcement of our rights under any lease, disputes that arise as to any aircraft or for any other purpose that GECAS reasonably determines is necessary in connection with the performance of its services;
	•		periodic reporting of operational information relating to the aircraft, including providing certain reports to the policy provider; and
	•		certain aviation insurance related services.

The servicing agreements provide that GECAS act in accordance with laws applicable to it, in certain cases with directions given by us or a manager, a cash manager or an administrative agent on behalf of us, with the specified standard of care described below and with the specified conflicts standard described below. GECAS does not have any fiduciary or other implied duties or obligations to us, our shareholders or any other person. GECAS and its respective subsidiaries cannot be held responsible for any liabilities of ours, including any payment of any dividends to our shareholders or payments due in respect of any financing.

Aircraft Agreed to be Serviced

GECAS currently services all of our aircraft. Pursuant to the Master Servicing Agreement, GECAS will service all additional aircraft that we acquire, including aircraft acquired by our

subsidiaries, except for aircraft that GECAS does not accept for servicing for one of the following reasons:

•

GECAS believes that the provision of any of the services or any actions, inactions or consequences related thereto or arising therefrom, or any conditions, events or circumstances existing at any time of determination, may directly or indirectly lead to or create:

	•		a violation of any applicable law with respect to GECAS or its affiliates or of any GE policies;
	•		an investigation by any governmental authority of or relating to GECAS or any of its affiliates;
	•		a conflict of interest with respect to any person that is unacceptable to GECAS;
	•		a requirement of resources being allocated to, or expenses being incurred in connection with, the servicing of one or more of such aircraft, individually or in the aggregate with respect to any group thereof, which will be materially different from those being allocated to, or incurred in connection with, other aircraft which are serviced by GECAS;

	•		an aircraft we wish to acquire is more than 20 years old when we acquire it or is not manufactured by manufacturers based in North America, South America, Asia or Europe; or such aircraft is of a model or type not then currently in the fleet owned by GECAS and its affiliates or is of a model or type of which GECAS has decided to phase out of its owned fleet;
	•		an aircraft we wish to acquire is on lease to or otherwise involves a person with whom GECAS or any of its affiliates is involved in a legal proceeding or otherwise with which GECAS or any of its affiliates has a material dispute;
	•		any default or event of default, or certain potential events of default, by us exists under the Master Servicing Agreement or any other servicing agreement we have entered into with GECAS, or any guarantees or any related or other agreements with GECAS or any of its affiliates, which has not been or will not reasonably be expected to be cured on or before the date that services in respect of any such additional aircraft are expected to commence; or
	•		as we and GECAS so mutually agree (although neither party has any obligation to do so).

Operating Guidelines

Under the servicing agreements, GECAS is entitled to exercise such authority as is necessary to give it practical and working autonomy in performing its services. The servicing agreements provide that GECAS give us and our agents access to records related to the aircraft under specified circumstances to enable us to monitor the performance by GECAS, except for internal correspondence, approval materials, internal evaluations and similar documents or other records developed by GECAS and its affiliates for their own use. GECAS also does not commingle any funds of ours with its own funds.

The following transactions entered into by GECAS on our behalf require our prior written approval:

•

sales of our aircraft (other than sales made in accordance with the terms of any lease in existence on the date of acquisition of the relevant aircraft);

	•		entering into or renewing leases or extending most leases if the resulting lease does not comply with any applicable operating covenants set forth under our financing agreements or if a new lease grants a purchase option in favor of the lessee;
	•		terminating any lease or leases to any single lessee for aircraft then having an aggregate depreciated net book value in excess of $100 million unless such lease or leases are substituted or replaced by other substantially similar lease or leases;
	•		unless provided for in our budget, entering into any contract for certain major modification or maintenance of aircraft costing in excess of specified amounts;
	•		issuing any guarantee on our behalf, or otherwise pledging our credit, with certain exceptions related to trade payables, bonds and similar instruments obtained to repossess an aircraft, removing a lien or similar actions not involving payments or cash collateral deposits on our behalf in excess of $3 million and issuing guarantees related to our other obligations;
	•		except in limited circumstances, entering into, amending or granting a waiver with respect to, any transaction between us and GE Capital or any of its affiliates not contemplated in the servicing agreement including for the acquisition, sale or lease of any aircraft assets from or to, or the obtaining of services by any such person (except for the acquisition, sale, exchange or lease of or services in respect of any engine, parts or components thereof, or aircraft spare parts or engine spare parts, components or ancillary equipment or devices furnished therewith);
	•		incurring any actual or contingent liability unless (1) contemplated in our budget, (2) incurred in entering into a lease or sale or performing any obligation under a lease or sale contract or (3) incurred in the ordinary course of business and so long as such individual liability does not result in a net out-of-pocket cash expenditure of more than $3 million; and
	•		entering into any order or commitment to acquire, or acquiring, aircraft or, so long as no individual net (after credit for exchanges, replacements or similar items) out-of-pocket cash purchase price exceeds $3 million, aircraft engines unless, in the case of aircraft engines, provided for in a lease or as provided for in our budget or if GECAS determines the acquisition of the engine is necessary or appropriate.

The servicing agreements require all transactions entered into by GECAS on behalf of us other than intracompany transactions among us and our subsidiaries to be at arm’s length and on market terms unless otherwise agreed or directed by us.

Budgets

The servicing agreements call for us to prepare each year a single lease operating budget for each of our aircraft and a single budget for the aircraft expenses related to all such aircraft.

Standard of Care

GECAS has agreed to perform the services required by the servicing agreements with reasonable care and diligence at all times.

Term and Termination

The Master Servicing Agreement expires in 2021. The Initial Portfolio Servicing Agreement expires on the later of (1) the maturity date of the notes issued in the securitization and (2) the date of repayment of all principal and other amounts due under the securitization (including any amounts owed to the policy provider). The Subsidiary Servicing Agreements expire at various dates, none of which is before 2021.

We have the right to terminate any servicing agreement (except, in the case of the Initial Portfolio Servicing Agreement, which also requires the prior written consent of the policy provider) if, among other things,

	•		GECAS ceases to be at least majority-owned directly or indirectly by GE Capital, or its ultimate parent, GE;
	•		GECAS fails in any material respect to perform any material services under the servicing agreement which results in liability of GECAS due to its gross negligence or willful misconduct (including willful misconduct constituting fraud) in respect of its obligation to apply the standard of care or conflicts standard in respect of performance of the services in a manner that is materially adverse to us and our applicable subsidiaries taken as a whole;
	•		GECAS fails in any material respect to perform any material services under the servicing agreement in accordance with the standard of care or the conflicts standard in a manner that is materially adverse to us and our applicable subsidiaries taken as a whole;
	•		GECAS, GE Capital or GE becomes subject to bankruptcy or insolvency proceedings;
	•		with respect to the Master Servicing Agreement and the GAL Servicing Agreement, we have insufficient funds for the payment of certain dividends while a significant portion of our available aircraft remain off-lease for a specified period;
	•		with respect to the Initial Portfolio Servicing Agreement, we have insufficient funds for the payment of interest on the notes for a period of at least 60 days;
	•		with respect to the Initial Portfolio Servicing Agreement, at least 15% of the number of aircraft assets remain off-lease but available for re-lease for a period of at least three months following specified events set forth in the indenture; or
	•		with respect to the Initial Portfolio Servicing Agreement, without limiting GECAS’s rights under the security trust agreement, GECAS takes any steps for the purpose of processing the appointment of an administrative receiver or the making of any administrative order or for instituting a bankruptcy, reorganization, arrangement, insolvency, winding up, liquidation, composition or any similar proceeding under the laws of any jurisdiction with respect to any person in the Genesis Funding, and any of its subsidiaries, or any of the aircraft assets.

In addition, in the case of the Initial Portfolio Servicing Agreement, the policy provider also has the right to terminate such servicing agreement under the circumstances described above. GECAS is entitled to terminate a servicing agreement if, among other things, we default in our payment and other obligations thereunder, any material representation or warranty made by us or our subsidiaries is false or misleading in a manner material to GECAS, we or our subsidiaries become subject to bankruptcy or other insolvency proceedings, we or any of our applicable subsidiaries no longer hold any aircraft, or any guarantee of obligations under the servicing agreement in favor of GECAS ceases to be in effect.

Under the Initial Portfolio Servicing Agreement, we represented and warranted to GECAS that, in the event that any competitor of GECAS controls or becomes the beneficial owner, directly or indirectly, of more than 50% of any class of our securities or obtains director appointment rights, we will automatically be replaced as manager of our Initial Portfolio under the management agreement.

Under the Master Servicing Agreement and the Subsidiary Servicing Agreement, GECAS is entitled to terminate the agreement, subject to certain notice periods described below, if any

competitor to GECAS controls or becomes the beneficial owner, directly or indirectly, of more than 10% of any class of our securities or obtains director appointment rights and we are unable to restructure the Master Servicing Agreement (or are otherwise unwilling to restructure the Master Servicing Agreement) and the services provided thereunder in a manner acceptable to GECAS. Under our servicing agreements, a competitor is defined by reference to certain named aircraft leasing companies and their successors and more generally as any other company that has consolidated annual aircraft leasing or aircraft or engine manufacturing revenues of in excess of $200 million.

To mitigate the risk of these potential terminations by GECAS, we have included certain provisions in our bye-laws applicable to the acquisition by a competitor of GECAS of a beneficial interest in 10% or more of our voting securities. Our bye-laws provide that if a competitor of GECAS acquires beneficial ownership of 10% or more of our shares, then we have the option, but not the obligation, within 90 days of the acquisition of such threshold beneficial ownership, to require that shareholder to tender for all of our remaining ADSs, or to sell such number of shares to us or to third parties at fair market value as would reduce its beneficial ownership to less than 10%. In addition, our bye-laws provide that the vote of each share held by a competitor of GECAS who beneficially holds 10% or more, but less than 50%, of our shares will be reduced to one-fifth of a vote per share on all matters upon which our shareholders may vote.

GECAS may also resign under any servicing agreement with respect to all aircraft serviced thereunder or any affected aircraft, as the case may be, if it reasonably determines that directions given, or services required, would, if carried out, be unlawful under applicable law, be in violation of any GE corporate policy regarding business practices or legal, ethical or social matters, be likely to lead to an investigation by any governmental authority of GECAS or its affiliates, expose GECAS to liabilities for which, in GECAS’s good faith opinion, adequate bond or indemnity has not been provided or place GECAS in a conflict of interest with respect to which, in GECAS’s good faith opinion, GECAS could not continue to perform its obligations under the servicing agreement with respect to all serviced aircraft or any affected aircraft, as the case may be. Whether or not it resigns, GECAS is not required to take any action of the foregoing kind. GECAS may also resign in certain circumstances if it becomes subject to taxes for which we do not indemnify GECAS.

Under the Master Servicing Agreement, GECAS’s resignation or removal as servicer, and any termination of the Master Servicing Agreement as provided above, will be effective immediately after a five-day cure period in the case of a termination because we have failed to pay amounts owing to GECAS when due, immediately in the case of an acquisition by a competitor of GECAS of beneficial ownership of 50% or more of our shares, and otherwise 120 days (or in the event a tender for our shares is made by a competitor of GECAS as described above, such longer period ending on the earlier of 180 days after notice of resignation or the date the tender is consummated) after the notice of any resignation or removal, or termination.

The Initial Portfolio Servicing Agreement provides that GECAS may not resign or be removed as servicer, and such servicing agreement may not be terminated as provided above, unless a replacement servicer has been appointed and Genesis Funding has obtained a confirmation from the rating agencies rating its notes that they will not lower, qualify or withdraw any rating as a result, as well as the consent of the policy provider. If a replacement servicer has not been appointed within 90 days after notice of any termination, resignation or removal, the

servicer may petition any court of competent jurisdiction to appoint a replacement servicer, provided that GECAS may terminate this servicing agreement immediately after a five-day cure period if Genesis Funding fails to pay GECAS any amount due to GECAS.

None of Genesis Lease, Genesis Funding or our other subsidiaries, as the case may be, nor the servicer may assign its rights and obligations under any servicing agreement without the other party’s prior consent. The servicer may, however, delegate some, but not all, of its duties to its affiliates.

Competitors

Pursuant to the Master Servicing Agreement, we will not sell Genesis Funding or any of its subsidiaries, or any of our other subsidiaries being serviced by GECAS to a competitor of GECAS pursuant to an arrangement that requires GECAS to continue to provide services following a sale of such subsidiary, and we will not permit competitively sensitive information obtained from GECAS to be provided to any such competitor even if such competitor is a shareholder or has the right to elect a member of our board of directors. Furthermore, if a competitor of GECAS acquires control of more than 10% of our voting securities or obtains director appointment rights, we will no longer be able to appoint our representatives as directors on the board of directors or similar group of any securitization or similar subsidiary sponsored by us, including Genesis Funding, and instead such directors will be appointed by the existing directors of such securitization or similar subsidiary and a representative of a competitor of GECAS may not be appointed. We may also be required to screen off certain of our directors and employees from competitively sensitive information provided by GECAS.

Servicing Fees

The Initial Portfolio Servicing Agreement provides that we pay to GECAS a base fee of $150,000 per month, which increases by 0.01% of the maintenance-adjusted base value (at the time of acquisition) of each aircraft acquired into Genesis Funding that is not an aircraft in our Initial Portfolio. Genesis Acquisition’s servicing agreement provides that Genesis Acquisition will pay to GECAS a monthly base fee of 0.01% of the purchase price of each aircraft acquired by Genesis Acquisition. Each servicing agreement also provides that we will pay to GECAS a rent fee equal to 1.0% of the aggregate amount of basic rent due for all or any part of a month for any aircraft serviced under such agreement plus 1.0% of the aggregate amount of basic rent actually paid for all or any part of a month for any aircraft serviced under such agreement. GECAS is also entitled to additional servicing fees consisting of a sales fee for each sale of an aircraft equal to 1.5% of the aggregate gross proceeds in respect of dispositions of aircraft assets. In addition, we will pay a fee to GECAS in connection with GECAS’s involvement with lessee consents and/or novations that may be required for any aircraft that we acquire or refinance. Such fees will be $6,000 per applicable aircraft. Fees for additional services will be as mutually agreed.

Conflicts of Interest

In addition to servicing our aircraft, GECAS currently manages and remarkets for lease or sale other aircraft and will continue to market for sale or lease other aircraft for third parties (including other aircraft owned by GE Capital and its affiliates). In the course of conducting such activities, GECAS will from time to time have conflicts of interest in performing its obligations on our behalf. See Item 3.D. “Risk Factors—Risks Related to Our Relationships with GECAS, Its Affiliates and Other Service Providers—GECAS and its affiliates will have conflicts of interest with us, and their limited contractual or other duties may not restrict them

from favoring their own business interests to our detriment.” If a conflict of interest arises as to one of our aircraft and other aircraft managed by GECAS, GECAS must perform the services in good faith, and, to the extent that either two or more of our particular aircraft or one of our aircraft and other aircraft managed by GECAS have substantially similar objectively identifiable characteristics that are relevant for purposes of the particular services to be performed, GECAS has agreed not to discriminate among our aircraft or between any of our aircraft and any other managed aircraft on an unreasonable basis.

If GECAS in good faith determines that circumstances as to a particular aircraft or lease require an arm’s-length negotiation between GECAS or any of its affiliates and us and GECAS believes it would not be appropriate for it to act on behalf of us, GECAS has agreed to notify us promptly and to withdraw from acting as the servicer with respect to the matter and we have agreed to appoint an independent representative (which may be us or any of our affiliates or subsidiaries, but not a competitor to GECAS) to act on our behalf. GECAS is entitled to act on its own or its affiliates’ behalf in those negotiations. In most cases we will continue to be liable for the fees of GECAS and if we elect to engage an independent representative other than ourselves we will be liable for such independent representative’s fees as well.

Indemnification

We assume liability for, and have agreed to indemnify GECAS on an after-tax basis against, any losses that arise as a result of or in connection with the aircraft or GECAS’s performance of its obligations under the servicing agreement or from errors in judgment or omissions by GECAS under the servicing agreement, except for any loss that is finally adjudicated to have been caused directly by GECAS from gross negligence or willful misconduct (including willful misconduct constituting fraud) in respect of its obligation to apply its standard of care or conflicts standard described above in the performance of its services. We have likewise agreed that GECAS and its affiliates have no liability to us or any other person for any losses in any way arising out of the services except as provided in the foregoing sentence (also referred to as GECAS’s “standard of liability”). We have also generally agreed to indemnify GECAS and its affiliates as to losses arising out of our IPO and the disclosure in our IPO prospectus, except certain disclosures provided by GECAS.

Facility Agreement

Please see Item 5.B. “Liquidity and Capital Resources—Debt Facilities” for description of (i) the Facility Agreement, dated as of September 19, 2008, among Genesis Portfolio Funding I Limited, as Borrower; Genesis Lease Limited, as principal guarantor and as manager of the Borrower; DVB Bank AG, HSH Nordbank AG and KFW IPEX-Bank GmbH, as joint arrangers and underwriters; HSH Nordbank AG, as the facility agent and security trustee; and the other parties named therein.

Revolving Credit Agreement

Please see Item 5.B. “Liquidity and Capital Resources—Credit Agreement” for description of the Credit Agreement, dated as of April 5, 2007, and as subsequently amended, among Genesis Acquisition, as borrower, Genesis, as Manager, the financial institutions party thereto as lenders, Citibank, N.A., as administrative agent, and Deutsche Bank Trust Company Americas, as security trustee and account bank.

D. Exchange Controls

We are not aware of any governmental laws, decrees or regulations in Bermuda that restrict the export or import of capital, including foreign exchange controls, or that affect the remittance of dividends, interest or other payments to non-resident holders of our securities. We are not aware of any limitation of non-resident or foreign owners to hold or vote our securities imposed by the laws of Bermuda of our memorandum of association or bye-laws.

E. Taxation

The following discussion is a summary of certain of the tax implications of an investment in our shares. You should consult your tax advisor prior to investing regarding all Irish, U.S. federal, U.S. state, U.S. local, Bermuda and other country income and other tax consequences of an investment in our shares, with specific reference to your own particular tax situation and recent changes in applicable law.

Irish Tax Considerations

The following discussion reflects the material Irish tax consequences applicable to both Irish and Non-Irish Holders (as defined below) of the acquisition, ownership and disposition of our shares. This discussion is based on Irish tax law, statutes, treaties, regulations, rulings and decisions all as at the date of this Annual Report. Taxation laws are subject to change, from time to time, and no representation is or can be made as to whether such laws will change, to what impact, if any, such changes will have on the summary contained in this Annual Report. Proposed amendments may not be enacted as proposed, and legislative or judicial changes, as well as changes in administrative practice, may modify or change statements expressed herein. This summary is of a general nature only. It does not constitute legal or tax advice nor does it discuss all aspects of Irish taxation that may be relevant to any particular holder of our shares. The Irish tax treatment of a holder of our shares may vary depending upon such holder’s particular situation, and holders or prospective purchasers of our shares are advised to consult their own tax advisors as to the Irish or other tax consequences of the purchase, ownership and disposition of our shares. You should consult your tax advisor prior to investing regarding all Irish, U.S. federal, U.S. state, U.S. local, Bermuda and other country income and other tax consequences of an investment in our shares, with specific reference to your own particular tax situation and recent changes in applicable law.

For the purposes of this summary of Irish tax considerations:

	•		An “Irish Holder” is a holder of our shares that (1) beneficially owns our shares by virtue of holding the related ADSs evidenced by the relevant ADR; (2) in the case of individual holders, is resident or ordinarily resident in Ireland under Irish taxation laws; and (3) in the case of a holder that is a company, is resident in Ireland under Irish taxation laws and is not also a resident of any other country under any double taxation agreement entered into by Ireland.
	•		A “Non-Irish Holder” is a Holder of our shares that is not an Irish Holder and has never been an Irish Holder.
	•		A “US Holder” is a holder of our shares that: (1) beneficially owns our shares by virtue of holding the related ADSs evidenced by the relevant ADR; (2) is a resident of the United States for the purposes of the Ireland/United States Double Taxation Convention; (3) in the case of an individual holder, is not also resident or ordinarily resident in Ireland for Irish tax purposes; (4) in the case of a corporate holder, is not resident in Ireland for Irish tax purposes and is not ultimately controlled by persons